<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 11, 1999
REGISTRATION NO. 333-
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
-----------------
<TABLE>
<CAPTION>
<S> <C> <C>
M.D.C. HOLDINGS, INC. DELAWARE 84-0622967
MDC CAPITAL FUNDING TRUST I DELAWARE TO BE APPLIED FOR
MDC CAPITAL FUNDING TRUST II DELAWARE TO BE APPLIED FOR
(Exact name of each registrant (State of incorporation or organization (I.R.S. Employer Identification Numbers)
as specified in its charter) of each registrant)
</TABLE>
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3600 S. YOSEMITE STREET
SUITE 900
DENVER, COLORADO 80237
(303) 773-1100
(Address, including zip code and telephone number, including area code, of each
registrants principal executive office)
DANIEL S. JAPHA, ESQ.
SECRETARY AND GENERAL COUNSEL - CORPORATE
3600 S. YOSEMITE STREET, SUITE 900
DENVER, COLORADO 80237
(303) 773-1100
(Name, address, including zip code and telephone number, including area code,
of agent for service)
-----------------
COPIES TO:
NICK NIMMO, ESQ. DANIEL J. ZUBKOFF, ESQ.
HOLME ROBERTS & OWEN LLP CAHILL GORDON & REINDEL
1700 LINCOLN STREET, SUITE 4100 EIGHTY PINE STREET
DENVER, COLORADO 80203 NEW YORK, NY 10005
(303) 861-7000 (212) 701-3000
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As
promptly as practicable after this registration statement becomes effective.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, please check the following box. /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of earlier effective
registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
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<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
- ------------------------------------------------------------------------------------------------------------------------------------
TITLE OF EACH CLASS OF SECURITIES TO BE AMOUNT TO BE PROPOSED MAXIMUM PROPOSED MAXIMUM
REGISTERED REGISTERED OFFERING PRICE PER SECURITY (5) AGGREGATE OFFERING PRICE (5)(6)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
M.D.C. HOLDINGS, INC.
Common Stock, par value $.01 per share
(1)
Preferred Stock, par value $.01 per share
Debt Securities (2)
Stock Purchase Contracts (3)
Guarantee of Trust Capital Securities of {$175,000,000 100% $175,000,000
MDC Capital Funding Trust I (4)
Guarantee of Trust Capital Securities of
MDC Capital Funding Trust II (4)
- -------------------------------------------------
MDC CAPITAL FUNDING TRUST I
Trust Capital Securities
- -------------------------------------------------
MDC CAPITAL FUNDING TRUST II
Trust Capital Securities
</TABLE>
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
- -----------------------------------------------------------------------------------
TITLE OF EACH CLASS OF SECURITIES TO BE AMOUNT OF
REGISTERED REGISTRATION FEE
- -----------------------------------------------------------------------------------
<S> <C>
M.D.C. HOLDINGS, INC.
Common Stock, par value $.01 per share
(1)
Preferred Stock, par value $.01 per share
Debt Securities (2)
Stock Purchase Contracts (3)
Guarantee of Trust Capital Securities of $48,650}
MDC Capital Funding Trust I (4)
Guarantee of Trust Capital Securities of
MDC Capital Funding Trust II (4)
- -------------------------------------------------
MDC CAPITAL FUNDING TRUST I
Trust Capital Securities
- -------------------------------------------------
MDC CAPITAL FUNDING TRUST II
Trust Capital Securities
</TABLE>
===============================================================================
<PAGE>
(1) Includes (a) shares of Common Stock into which certain series of Debt
Securities and Preferred Stock may be converted and for which no separate
consideration will be received and (b) shares of Common Stock issuable upon
settlement of the Stock Purchase Contracts being registered hereunder.
(2) Includes senior debt securities, senior subordinated debt securities and
junior subordinated debt securities, including debt securities ("Trust
Debentures") to be purchased by MDC Capital Funding Trust I or MDC Capital
Funding Trust II with the proceeds from the sale of the Trust Capital
Securities being registered hereunder (which Trust Debentures in certain
circumstances may later be distributed to the holders of Trust Capital
Securities of a Trust upon a dissolution of such Trust and a distribution
of the assets thereof).
(3) Contracts to purchase shares of Common Stock of M.D.C. Holdings, Inc. may
be offered as part of units that also include the Trust Capital Securities
being registered hereunder (or beneficial interests therein) or debt
obligations of third parties, including U.S. Treasury securities, purchased
with the proceeds of the sale of such units and pledged to secure the
obligations of the holders to purchase such shares of Common Stock.
(4) Includes the rights of holders of the Trust Capital Securities under these
Guarantees and back-up undertakings, consisting of obligations of M.D.C.
Holdings, Inc. as set forth in the declarations of trust of MDC Capital
Funding Trust I and MDC Capital Funding Trust II (including the obligation
of M.D.C. Holdings, Inc. to pay and be responsible for certain expenses,
costs, liabilities and debts of the trusts) and the indentures governing
the Trust Debentures of M.D.C. Holdings, Inc., in each case as further
described in this Registration Statement.
(5) Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457 under the Securities Act of 1933, as amended.
M.D.C. Holdings, Inc. is registering an indeterminate amount of Common
Stock, Preferred Stock, Debt Securities, Stock Purchase Contracts and Trust
Capital Securities Guarantees of M.D.C. Holdings, Inc. and an indeterminate
amount of Trust Capital Securities of MDC Capital Funding Trust I and MDC
Capital Funding Trust II. Any securities registered hereunder may be sold
separately or as units with other securities, including those registered
hereunder. One or more of these securities may be sold under marketing
service marks of the underwriters for such securities.
(6) Exclusive of accrued interest or dividends, if any.
Pursuant to Rule 429 under the Securities Act of 1933, this Registration
Statement contains a combined prospectus that also relates to $125,000,000 of
other securities registered on Form S-3, File No. 333-36631 (the "Previously
Registered Securities"), which have not been offered or sold as of the date of
the filing of this Registration Statement. This Registration Statement
constitutes Post-Effective Amendment No. 1 to Registration Statement File No.
333-36631, pursuant to which the total amount of unsold Previously Registered
Securities registered on Registration Statement File No. 333-36631, without
limitation as to class of securities, may be offered and sold as any of the
securities registered hereunder. In the event the Previously Registered
Securities are offered and sold prior to the effective date of this Registration
Statement, the amount of Previously Registered Securities so sold will not be
included in the prospectus hereunder.
-------------------
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THIS REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(a), MAY DETERMINE.
<PAGE>
[OBJECT OMITTED]
The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and we are not soliciting offers to buy these
securities in any state where the offer is not permitted.
<PAGE>
PROSPECTUS SUBJECT TO COMPLETION,
JANUARY 11, 1999
M.D.C. HOLDINGS, INC.
MDC CAPITAL FUND TRUST I
MDC CAPITAL FUND TRUST II
3600 S. YOSEMITE STREET
SUITE 900
DENVER, COLORADO 80237
(303) 773-1100
$300,000,000
- -------------------------------------------------------------------------------
The following are types of securities that we may offer and sell
under this prospectus:
- Common Stock - Debt Securities
- Preferred Stock - Stock Purchase Contracts
In addition, we, in conjunction with our newly created trust subsidiaries,
may offer and sell:
- Trust Capital Securities and related guarantees
We may offer these securities separately or as units which may include
other securities. We will describe in a prospectus supplement, which must
accompany this prospectus, the securities we are offering and selling, as well
as the specific terms of the securities. Those terms may include:
- Maturity - Redemption terms
- Interest rate - Listing on a securities exchange
- Sinking fund terms - Amount payable at maturity
- Currency of payments
- -------------------------------------------------------------------------------
THE SECURITIES AND EXCHANGE COMMISSION AND STATE SECURITIES REGULATORS HAVE
NOT APPROVED OR DISAPPROVED THESE SECURITIES, OR DETERMINED IF THIS PROSPECTUS
IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
- -------------------------------------------------------------------------------
We may offer the securities in amounts, at prices and on terms determined
at the time of offering. We may sell the securities directly to you, through
agents we select, or through underwriters and dealers we select. If we use
agents, underwriters or dealers to sell the securities, we will name them and
describe their compensation in a prospectus supplement.
January , 1999
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C>
Where You Can Find More Information............................................................1
Incorporation of Certain Documents by Reference................................................2
M.D.C. Holdings,Inc............................................................................4
The Trusts.....................................................................................5
Use of Proceeds................................................................................7
Ratio of Earnings to Fixed Charges.............................................................7
Description of Common Stock....................................................................8
Description of Preferred Stock.................................................................9
Description of Trust Capital Securities........................................................11
Description of Trust Capital Securities Guarantees.............................................13
Description of the Debt Securities.............................................................16
Relationship among the Trust Capital Securities, the Trust Debentures
and the Trust Capital Securities Guarantee.....................................................25
Description of Stock Purchase Contracts and Stock Purchase
Units.....................................................................................26
Book-Entry Issuance............................................................................27
Plan of Distribution...........................................................................29
Legal Matters..................................................................................32
Experts........................................................................................32
</TABLE>
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WHERE YOU CAN FIND MORE INFORMATION
M.D.C. Holdings, Inc. ("MDC" or the "Company") files annual, quarterly and
special reports, proxy statements and other information with the Securities and
Exchange Commission (the "Commission") under the Securities Exchange Act of 1934
(the "Exchange Act"). You may read and copy this information at the following
locations of the Commission:
Judiciary Plaza, Room 10024 Seven World Trade Center,
450 Fifth Street, N.W. Street Suite 1300
Washington, D.C. 20549 New York, New York 10048
Citicorp Center
500 West Madison Street
Suite 1400
Chicago, Illinois 60661
You can also obtain copies of this information by mail from the Public
Reference Room of the Commission, 450 Fifth Street, N.W., Room 10024, Washington
D.C. 20549, at prescribed rates. You may obtain information on the operation of
the Public Reference Room by calling the Commission at (800) SEC-0330.
<PAGE>
2
The Commission also maintains an internet world wide web site that contains
reports, proxy statements and other information about issuers, like MDC, who
file electronically with the Commission. The address of that site is
http://www.sec.gov.
You can also inspect reports, proxy statements and other information about
us at the offices of the New York Stock Exchange, Inc., 20 Broad Street, New
York, New York 10005.
MDC and its trust subsidiaries have filed jointly with the Commission a
registration statement on Form S-3 that registers the securities they are
offering (the "Registration Statement"). The Registration Statement, including
the attached exhibits and schedules, contains additional relevant information
about MDC, the trusts and the securities offered. The rules and regulations of
the Commission allow us to omit certain information included in the Registration
Statement from this prospectus.
There are no separate financial statements of the trusts in this
prospectus. We do not believe such financial statements would be material to the
holders of the Trust Capital Securities because (1) all of the voting securities
of the Trusts will be owned, directly or indirectly, by MDC, a reporting company
under the Exchange Act, (2) the Trusts have no independent operations and exist
for the sole purpose of issuing the securities representing undivided beneficial
interests in their respective assets and investing the proceeds thereof in the
Trust Debentures, (3) the obligations of MDC under the Trust Capital Securities
Guarantee and the Trust Common Securities Guarantee have the effect of providing
a full, irrevocable and unconditional guarantee of the trusts' obligations under
their securities, to the extent set forth in such guarantees. Neither trust is
currently subject to the information reporting requirements of the Exchange Act.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Commission allows us to "incorporate by reference" information into
this prospectus. This means that we can disclose important information to you by
referring you to another document filed separately with the Commission. The
information incorporated by reference is considered to be part of this
prospectus, except for any information that is superseded by information that is
included directly in this document.
This prospectus includes by reference the documents listed below that we
have previously filed with the Commission and that are not included in or
delivered with this document. They contain important information about our
company and its financial condition.
<TABLE>
<CAPTION>
FILING PERIOD
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<S> <C>
Annual Report on Form 10-K Year ended December 31, 1997
</TABLE>
<PAGE>
3
<TABLE>
<CAPTION>
FILING PERIOD
===============================================================================
<S> <C>
Quarterly Reports on Form 10-Q Quarter ended September 30, 1998
Quarter ended June 30, 1998
Quarter ended March 31, 1998
Current Reports on Form 8-K Filed March 27, 1998
Filed January 22, 1998
Filed January 14, 1998
</TABLE>
We incorporate by reference additional documents that we may file with the
Commission between the date of this prospectus and the date of the closing of
this offering. These documents include periodic reports, such as Annual Reports
on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, as
well as proxy statements.
You can obtain any of the documents incorporated by reference in this
document from MDC without charge, excluding any exhibits to those documents
unless the exhibit is specifically incorporated by reference as an exhibit to
this prospectus. You can obtain documents incorporated by reference in this
prospectus by requesting them in writing or by telephone from MDC at the
following address:
Daniel S. Japha
Secretary
M.D.C. Holdings, Inc.
3600 South Yosemite Street
Suite 900
Denver, Colorado 80237
(303) 773-1100.
We have not authorized anyone to give any information or make any
representation about us that is different from, or in addition to, that
contained in this prospectus or in any of the materials that we have
incorporated by reference into this document. Therefore, if anyone does give you
information of this sort, you should not rely on it. If you are in a
jurisdiction where offers to exchange or sell, or solicitations of offers to
exchange or purchase, the securities offered by this document or the
solicitation of proxies is unlawful, or if you are a person to whom it is
unlawful to direct these types of activities, then the offer presented in this
document does not extend to you. The information contained in this document
speaks only as of the date of this document, unless the information specifically
indicates that another date applies.
<PAGE>
4
M.D.C. HOLDINGS, INC.
THE HOLDING COMPANY
M.D.C. Holdings, Inc. ("MDC" or the "Company") is a Delaware corporation
which was formed in 1972. MDC's primary business is owning and managing
subsidiary companies which build homes under the name "Richmond American Homes."
MDC also owns and manages HomeAmerican Mortgage Corporation which originates
mortgage loans.
THE HOMEBUILDING COMPANIES
Richmond American Homes builds homes in several growth markets, including
Denver where we are the largest homebuilder. We also build homes in the suburban
Washington, D.C. area in both Virginia and Maryland and rank as the second
largest builder in that market. We are also one of the larger homebuilders in
Phoenix, Tucson, Las Vegas and Colorado Springs. We have a growing presence in
several Southern California counties as well as the San Francisco Bay area.
OUR HOMEBUILDING STRATEGY
We focus on building quality homes at affordable prices. Most of our home
buyers are buying either their first or second home.
HOME SELLING PRICES
Most of our homes range in price from under $100,000 to $400,000, although
some homes we build cost as much as $900,000. In 1997, the average selling price
of our homes was $179,000 compared with $195,500 in the first nine months of
1998.
HOMEAMERICAN MORTGAGE CORPORATION
Our mortgage company provides mortgage loans to most of our home buyers.
For the convenience of the home buyers, we have loan offices in all of the
locations where we build homes.
LOCATION OF EXECUTIVE OFFICES
The principal executive offices of the Company are at 3600 South Yosemite
Street, Suite 900, Denver, Colorado 80237 (telephone (303) 773-1100). We also
offer homes and mortgages through our Internet web site.
<PAGE>
5
You can obtain additional information about us in the reports and other
documents incorporated by reference in this prospectus. See "Where You Can Find
More Information" and "Incorporation of Certain Documents by Reference."
THE TRUSTS
MDC created two Delaware business trusts pursuant to two Declarations of
Trust executed by MDC as sponsor for each trust and the appointed trustee for
each trust and filing of a Certificate of Trust for each Trust with the Delaware
Secretary of State. The trusts are named MDC Capital Funding Trust I and MDC
Capital Funding Trust II (collectively, the "Trusts," and individually, each a
"Trust"). MDC will file an Amended and Restated Declaration of Trust (a
"Declaration") for each Trust, which will state the terms and conditions for
each Trust to issue and sell its capital securities ("Trust Capital Securities")
and common securities ("Trust Common Securities," and together with the Trust
Capital Securities, the "Trust Securities"). A form of Declaration is filed as
an exhibit to the registration statement of which this prospectus forms a part.
Each trust will exist solely to:
- - issue and sell its Trust Securities;
- - use the proceeds from the sale of its Trust Securities to purchase and hold
a series of MDC's senior or subordinated notes (the "Trust Debentures");
- - maintain its status as a grantor trust for federal income tax purposes; and
- - engage in other activities that are necessary or incidental to these
purposes.
MDC will purchase all of the Trust Common Securities of each Trust. The
Trust Common Securities will represent an aggregate liquidation amount equal to
at least 3% of each Trust's total capitalization. The Trust Capital Securities
will represent the remaining 97% of such Trust's total capitalization. The Trust
Common Securities will have terms substantially identical to, and will rank
equal in priority of payment with, the Trust Capital Securities. However, if MDC
defaults on the Trust Debentures, then cash distributions and liquidation,
redemption and other amounts payable on the Trust Common Securities will be
subordinate to the Trust Capital Securities in priority of payment.
MDC will guarantee the Trust Capital Securities as described later in this
prospectus.
<PAGE>
6
MDC has appointed The First National Bank of Chicago as trustee to conduct
each Trust's business and affairs.
Only MDC, as owner of the Trust Common Securities, can remove or replace
the trustee. In addition, MDC can increase or decrease the number of trustees. A
majority of the trustees (the "Regular Trustees") of each Trust will be persons
who are employees or officers of or affiliated with the Company. One Trustee of
each Trust will be a financial institution which will be unaffiliated with the
Company and which shall act as property trustee and as indenture trustee for
purposes of the Trust Indenture Act of 1939 (the "Trust Indenture Act"),
pursuant to the terms set forth in a prospectus supplement (the "Property
Trustee"). In addition, unless the Property Trustee maintains a principal place
of business in the State of Delaware, and otherwise meets the requirements of
applicable law, another trustee of each Trust will either be a natural person
who is a resident of the State of Delaware or an entity which has its principal
place of business or reside in the State of Delaware (the "Delaware Trustee").
MDC will pay all fees and expenses related to each Trust and each offering of
the related Trust Capital Securities and will pay all ongoing costs and expenses
of each Trust, except such Trust's obligations under the related Trust
Securities. MDC will fully and unconditionally guarantee the payment of such
fees and expenses.
The Trusts will not have separate financial statements. The statements
would not be material to holders of the Trust Capital Securities because neither
Trust will have independent operations. Each Trust exists solely for the reasons
described above.
The Property Trustee will hold title to the Trust Debentures for the
benefit of the holders of the Trust Securities, and the Property Trustee will
have the power to exercise all rights, powers and privileges as the holder of
the Trust Debentures under the indenture pursuant to which the Trust Debentures
are issued (the "Debenture Indentures"). In addition, the Property Trustee will
maintain exclusive control of a segregated non-interest bearing bank account
(the "Property Account") to hold all payments made in respect of the Trust
Debentures for the benefit of the holders of the Trust Securities. The Property
Trustee will make payments of distributions and payments on liquidation,
redemption and otherwise to the holders of the Trust Securities out of funds
from the Property Account. The Guarantee Trustee (defined herein) will hold the
Trust Capital Securities Guarantee (defined herein) for the benefit of the
holders of the Trust Capital Securities. MDC, as the direct or indirect holder
of all the Trust Common Securities, will have the right to appoint, remove or
replace any Regular Trustee and to increase or decrease the number of Regular
Trustees. Holders of the Trust Common Securities will have the right to replace
the Property Trustee (or, upon the occurrence and continuance of an event of
default under the Declaration, the holders of a majority in liquidation amount
of the Trust Capital Securities), provided that the successor Property Trustee
shall be a corporation with trust powers organized under the laws of the United
States or any State thereof with a combined capital and surplus of at least $50
million. Pursuant to the Debenture Indenture, MDC, as borrower, will pay all
fees and expenses related to the Trusts and the offering of the Trust
Securities.
<PAGE>
7
The rights of the holders of the Trust Capital Securities, including
economic rights, rights to information and voting rights, are set forth in the
Declaration and the Delaware Business Trust Act (the "Trust Act"). The principal
place of business of the Trusts is c/o M.D.C. Holdings, Inc., 3600 S. Yosemite
Street, Suite 900, Denver, Colorado 80327, and its telephone number is (303)
773-1100.
USE OF PROCEEDS
Except as may otherwise be described in the prospectus supplement relating
to an offering of securities, the net proceeds from the sale of the securities
(including Trust Debentures issued to the Trusts in connection with the
investment by the Trusts of all of the proceeds from the sale of the Trust
Securities) offered pursuant to this prospectus and such prospectus supplement
(the "Offered Securities") will be used by the Company primarily in its real
estate acquisition and development and home-building activities . The remainder
of the net proceeds will be used for general corporate purposes. Any specific
allocation of the net proceeds of an offering of securities to a specific
purpose will be determined at the time of such offering and will be described in
the related prospectus supplement.
RATIOS OF EARNINGS TO FIXED CHARGES
The following table sets forth our consolidated ratios of earnings to fixed
charges for the periods shown:
<TABLE>
<CAPTION>
Nine Months Ended
September 30, Fiscal Year Ended December 31,
------------------ ----------------------------------------------
1998 1997 1997 1996 1995 1994 1993
--------- -------- --------- -------- --------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges
(unaudited)(1) 4.67 2.29 2.55 2.02 1.79 1.81 1.71
</TABLE>
- ------------------------
(1) In computing the ratio of earnings to fixed charges, fixed charges consist
of homebuilding and corporate interest expense plus (i) amortization and
expensing of debt expenses; (ii) amortization of discount or premium
relating to indebtedness; and (iii) capitalized interest. Earnings are
computed by adding fixed charges (except capitalized interest) and
amortization of previously capitalized interest during the period to pretax
earnings from continuing operations.
<PAGE>
8
DESCRIPTION OF COMMON STOCK
MDC has authorized 100,000,000 shares of Common Stock, $.01 par value
("Common Stock").
At December 31, 1998, approximately 27,858,000 shares of the Common Stock
were issued and approximately 21,982,000 shares were outstanding. Holders of
shares of Common Stock are entitled to one vote for each share held of record on
matters submitted to a vote of stockholders. Holders of shares of the Common
Stock do not have cumulative voting rights in the election of directors to our
Board of Directors. The Board of Directors is divided into three classes, with
members of each class serving a three-year term.
A vote by the holders of a majority of shares of the Common Stock present
at a meeting at which a quorum is present is necessary to take action, except
for certain extraordinary matters which require the approval of the holders of
80% of the outstanding shares of voting stock. In addition, the holders of 80%
of the shares of outstanding voting stock must approve any of the following
matters, unless approved by a majority of Continuing Directors (as defined in
the Certificate of Incorporation) or unless certain minimum price and procedural
requirements are met:
(1) certain Business Combinations (as defined in our Certificate of
Incorporation) must be approved by the holders of 80% of the
shares of outstanding voting stock, unless approved by a majority
of Continuing Directors (as defined in the Certificate of
Incorporation) or unless certain minimum price and procedural
requirements are met. The types of Business Combinations a merger
or consolidation of the Company with any holder (directly or
indirectly) of more than 10% of the outstanding shares of voting
stock of the Company (an "Interested Stockholder") or certain
related parties;
(2) the sale or other disposition by the Company of any assets or
securities to an Interested Stockholder involving assets or
securities having a value of $15,000,000 or more than 15% of the
book value of the total assets or 15% of the stockholders' equity
of the Company; the adoption of any plan or proposal for the
liquidation or dissolution of the Company;
(3) the adoption of any amendment to our Bylaws; or
(4) any reclassification of securities, recapitalization, merger with
a subsidiary or other transaction which has the effect of
increasing an Interested Stockholder's proportionate ownership of
the capital stock of the Company)
<PAGE>
9
involving the Company and an Interested Stockholder. In the case
of any Business Combination involving payments to holders of
shares of the Common Stock, the fair market value per share of
such payments would have to be at least equal to the highest
value determined under the following alternatives: (i) the
highest price per share of the Common Stock paid by or on behalf
of the Interested Stockholder during the two years prior to the
public announcement of the proposed Business Combination (the
"Announcement Date") or in the transaction in which it became an
Interested Stockholder, whichever is higher; and (ii) the fair
market value per share of the Common Stock on the Announcement
Date or on the date on which the Interested Stockholder became an
Interested Stockholder, whichever is higher. "Fair market value"
is defined in the Certificate of Incorporation to mean, in the
case of exchange-listed or Nasdaq-quoted stock, the highest
closing price or closing bid in the 30 days preceding the date in
question, and, in the case of other property, the fair market
value as determined by a majority of the Continuing Directors.
Subject to the preferences applicable to any outstanding shares of
Preferred Stock of the Company, holders of shares of Common Stock are entitled
to dividends when declared by the Board of Directors of the Company from funds
legally available therefor and are entitled, in the event of liquidation, to
share ratably in all assets remaining after payment of liabilities. The shares
of Common Stock are neither redeemable nor convertible, and the holders of
Common Stock have no preemptive or subscription rights to purchase any
securities of the Company. All issued and outstanding shares of Common Stock are
validly issued, fully paid and nonassessable.
The transfer agent and registrar for the Common Stock is Continental Stock
Transfer & Trust Company, New York, New York.
DESCRIPTION OF PREFERRED STOCK
The following description of the Company's preferred stock, par value $.01
per share ("Preferred Stock"), is not complete. You should look at our
Certificate of Incorporation and By-laws.
GENERAL
Under the Certificate of Incorporation, the Company has authority to issue
up to 25 million shares of Preferred Stock, none of which were issued and
outstanding as of December 31, 1998. Shares of Preferred Stock may be issued
from time to time, in one or more series, as authorized by our Board of
Directors with any terms, preferences, conversion or other rights,
<PAGE>
10
voting powers, restrictions, limitations as to dividends or other distributions,
qualifications and terms or conditions of redemption as are determined by our
Board of Directors and permitted by Delaware law. At such time as our Board of
Directors determines the terms of the Preferred Stock, such terms will be set
forth in a Certificate of Designations to be filed with the Secretary of State
of Delaware. Upon filing, the Certificate of Designations will constitute an
amendment to the Certificate of Incorporation pursuant to the Delaware General
Corporation Law (the "DGCL"). The Preferred Stock will, when issued, be fully
paid and nonassessable and will have no preemptive rights. Our Board of
Directors may authorize the issuance of Preferred Stock with terms and
conditions that could have the effect of discouraging a takeover or other
transaction that holders of Common Stock might believe to be in their best
interests or in which holders of some, or a majority, of the shares of Common
Stock might receive a premium for their shares over the then market price of
such shares of Common Stock.
TERMS
The terms of each series of Preferred Stock will be described in any
prospectus supplement related to such series of Preferred Stock and may include
the following:
(1) the title and stated value of such Preferred Stock;
(2) the number of shares of such Preferred Stock offered and the
offering price and liquidation preference per share of such
Preferred Stock;
(3) the dividend rate(s), period(s) and/or payment date(s) or
method(s) of calculation thereof applicable to such Preferred
Stock;
(4) the date from which dividends on such Preferred Stock shall
accumulate, if applicable;
(5) the procedures for any auction and remarketing, if any, for such
Preferred Stock;
(6) the provision for a sinking fund, if any, for such Preferred
Stock;
(7) the provision for redemption, if applicable, of such Preferred
Stock;
(8) any voting rights of holders of such Preferred Stock;
(9) any other specific terms, preferences, rights, limitations or
restrictions of such Preferred Stock;
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11
(10) the relative ranking and preference of such Preferred Stock as to
dividend rights and rights upon liquidation, dissolution or
winding up of the affairs of the Company;
(11) any limitations on issuance of any series of Preferred Stock
ranking senior to or on a parity with such series of Preferred
Stock as to dividend rights and rights upon liquidation,
dissolution or winding up of the affairs of the Company; and
(12) the terms and conditions, if applicable, upon which such
Preferred Stock will be convertible into or participate in
dividends, if any, paid on the Common Stock, including the
conversion price (or manner of calculation thereof).
TRANSFER AGENT
The transfer agent and registrar for the Preferred Stock will be identified
in the applicable prospectus supplement.
DESCRIPTION OF THE TRUST CAPITAL SECURITIES
Each Trust may issue only one series of Trust Capital Securities having
terms described in the prospectus supplement relating thereto. The Declaration
of each Trust authorizes the Regular Trustees of such Trust to cause such Trust
to issue one series of Trust Capital Securities. Each Declaration will be
qualified as an indenture under the Trust Indenture Act. The Trust Capital
Securities will have such terms, including distributions, redemption, voting,
liquidation rights and such other preferred, deferred or other special rights or
such restrictions as shall be set forth in each Declaration or made part of each
Declaration by the Trust Indenture Act and the Trust Act. Reference is made to
the prospectus supplement relating to the Trust Capital Securities of a Trust
for specific terms, including:
(1) the distinctive designation of such Trust Capital Securities;
(2) the number of Trust Capital Securities issued by such Trust;
(3) the annual distribution rate (or method of deter mining such
rate) for Trust Capital Securities issued by such Trust and the
date or dates upon which such distributions shall be payable;
provided, however, that distributions on such Trust Capital
Securities shall be payable on a quarterly basis to
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12
holders of Trust Capital Securities as of a record date in each
quarter during which such Trust Capital Securities are
outstanding;
(4) whether distributions on Trust Capital Securities issued by such
Trust shall be cumulative, and, in the case of Trust Capital
Securities having such cumulative distribution rights, the
date(s) or method of determining the date(s) from which
distributions on Trust Capital Securities issued by such Trust
shall be cumulative;
(5) the amount(s) which shall be paid out of the assets of such Trust
to purchase or redeem Trust Capital Securities issued by such
Trust and the price(s) at which, the period(s) within which, and
the terms and conditions upon which, Trust Capital Securities
issued by such Trust shall be purchased or redeemed, in whole or
in part, pursuant to such obligation;
(6) the voting rights, if any, of Trust Capital Securities issued by
such Trust in addition to those required by law, including any
requirement for the approval by the holders of Trust Capital
Securities, or of Trust Capital Securities issued by one or more
Trusts, or of both, as a condition to specified action or
amendments to the Declaration of such Trust; and
(7) any other relevant rights, preferences, privileges, limitations
or restrictions of Trust Capital Securities issued by such Trust
not inconsistent with the Declaration of such Trust or with
applicable law. All Trust Capital Securities offered hereby will
be guaranteed by the Company as described under "Description of
the Trust Capital Securities Guarantees" below. Any applicable
United States federal income tax considerations applicable to any
offering of Trust Capital Securities will be described in the
prospectus supplement relating thereto.
In connection with the issuance of Trust Capital Securities, each Trust
will issue one series of Trust Common Securities. The Declaration of each Trust
authorizes the Regular Trustees of such Trust to issue on behalf of such Trust
one series of Trust Common Securities having such terms including distributions,
redemption, voting, liquidation rights or such restrictions as shall be set
forth therein. The terms of the Trust Common Securities issued by a Trust will
be substantially identical to the terms of the Trust Capital Securities issued
by such Trust and the Trust Common Securities will rank pari passu, and payments
will be made thereon pro rata, with the Trust Capital Securities except that,
upon an event of default under the Declaration, the rights of the holders of
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13
the Trust Common Securities to payment in respect of distributions and payments
upon liquidation, redemption and otherwise will be subordinated to the rights of
the holders of the Trust Capital Securities. All of the Trust Common Securities
of a Trust will be directly or indirectly owned by the Company.
DESCRIPTION OF THE TRUST CAPITAL SECURITIES GUARANTEES
Set forth below is a summary of information concerning the guarantees of
the Trust Capital Securities (the "Trust Capital Securities Guarantees") which
will be executed and delivered by the Company for the benefit of the holders
from time to time of Trust Capital Securities. Each Trust Capital Securities
Guarantee will be qualified as an indenture under the Trust Indenture Act.
Initially, The First National Bank of Chicago will act as indenture trustee
under each Trust Capital Securities Guarantee (the "Guarantee Trustee"). The
terms of each Trust Capital Securities Guarantee will be those set forth in such
Trust Capital Securities Guarantee and the prospectus supplement relating
thereto and those made part of such Trust Capital Securities Guarantee by the
Trust Indenture Act. The following summary does not purport to be complete and
is subject in all respects to the provisions of, and is qualified in its
entirety by reference to, the form of Trust Capital Securities Guarantee, which
is filed as an exhibit to the Registration Statement of which this prospectus
forms a part, the Trust Indenture Act and the prospectus supplement relating
thereto. Each Trust Capital Securities Guarantee will be held by the Guarantee
Trustee for the benefit of the holders of the Trust Capital Securities of the
applicable Trust.
GENERAL
Pursuant to each Trust Capital Securities Guarantee, the Company will
irrevocably and unconditionally agree to pay in full the Guarantee Payments (as
defined herein) (except to the extent paid by such Trust), to the holders of the
Trust Capital Securities issued by a Trust, as and when due, regardless of any
defense, right to set-off or counterclaim which such Trust may have or assert.
The following payments with respect to Trust Capital Securities issued by a
Trust, to the extent not paid by such Trust (the "Guarantee Payments"), will be
subject to the Trust Capital Securities Guarantee thereon (without duplication):
(1) any accrued and unpaid distributions which are required to be
paid on such Trust Capital Securities, to the extent such Trust
shall have funds available therefor;
(2) the redemption price, including all accrued and unpaid
distributions to the redemption date (the "Redemption Price"), to
the extent such Trust has funds available therefor, with respect
to any Trust Capital Securities called for redemption by such
Trust; and
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14
(3) upon a voluntary or involuntary termination, dissolution or
winding-up of such Trust (other than in connection with the
distribution of Trust Debentures to the holders of Trust Capital
Securities in exchange for their Trust Capital Securities), the
lesser of (a) the aggregate of the liquidation amount and all
accrued and unpaid distributions on such Trust Capital Securities
to the date of payment and (b) the amount of assets of such Trust
remaining available for distribution to holders of such Trust
Capital Securities in liquidation of such Trust.
The Company's obligation to make a Guarantee Payment may be satisfied by
direct payment of the required amounts by the Company to the holders of Trust
Capital Securities or by causing the applicable Trust to pay such amounts to
such holders.
Each Trust Capital Securities Guarantee will be a full and unconditional
guarantee with respect to the Trust Capital Securities issued by the applicable
Trust from the time of issuance of such Trust Capital Securities, but will not
apply to any payments or distributions when the Trust does not have sufficient
funds available to make such payments or distributions. If the Company does not
make interest payments on the Trust Debentures purchased by a Trust, such Trust
will not pay distributions on the Trust Capital Securities issued by such Trust
and will not have funds available therefor. See "Description of the Debt
Securities--Certain Covenants."
The Company has also agreed separately to guarantee the obligations of the
Trusts with respect to the Trust Common Securities (the "Trust Common Securities
Guarantees") to the same extent as the Trust Capital Securities Guarantee,
except that upon the occurrence and during the continuation of an event of
default under the Declaration, holders of Trust Capital Securities shall have
priority over holders of Trust Common Securities with respect to distributions
and payments on liquidation, redemption or otherwise.
CERTAIN COVENANTS OF THE COMPANY
In each Trust Capital Securities Guarantee, the Company will make certain
covenants that will be described in the prospectus supplement. The covenants
will remain in place so long as any Trust Capital Securities issued by the
applicable Trust remain outstanding. These covenants may provide that if any
event that would constitute an event of default shall exist under such Trust
Capital Securities Guarantee or the Declaration of such Trust, then certain
restrictions would be imposed on the Company.
MODIFICATION OF THE TRUST CAPITAL SECURITIES GUARANTEES; ASSIGNMENT
Except with respect to any changes which do not adversely affect the rights
of holders of Trust Capital Securities (in which case no vote will be required),
each Trust Capital Securities
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15
Guarantee may be amended only with the prior approval of the holders of not less
than a majority in aggregate liquidation amount of the outstanding Trust Capital
Securities issued by the applicable Trust. The manner of obtaining any such
approval of holders of such Trust Capital Securities will be as set forth in an
accompanying prospectus supplement. All guarantees and agreements contained in a
Trust Capital Securities Guarantee shall bind the successors, assigns,
receivers, trustees and representatives of the Company and shall inure to the
benefit of the holders of the Trust Capital Securities then outstanding of the
applicable Trust.
TERMINATION
Each Trust Capital Securities Guarantee will terminate as to the Trust
Capital Securities issued by the applicable Trust upon full payment of the
Redemption Price of all Trust Capital Securities of such Trust, upon
distribution of the Trust Debentures held by such Trust to the holders of the
Trust Capital Securities of such Trust in liquidation of such holders' interest
in such Trust Capital Securities or upon full payment of the amounts payable in
accordance with the Declaration of such Trust upon liquidation of such Trust.
Each Trust Capital Securities Guarantee will continue to be effective or will be
reinstated, as the case may be, if at any time any holder of Trust Capital
Securities issued by the applicable Trust must restore payment of any sums paid
under such Trust Capital Securities or such Trust Capital Securities Guarantee.
EVENTS OF DEFAULT
An event of default under a Trust Capital Securities Guarantee will occur
upon the failure of the Company to perform any of its payment or other
obligations thereunder. The holders of a majority in liquidation amount of the
Trust Capital Securities relating to such Trust Capital Securities Guarantee
have the right to direct the time, method and place of conducting any proceeding
for any remedy available to the Guarantee Trustee in respect of such Trust
Capital Securities Guarantee or to direct the exercise of any trust or power
conferred upon the Guarantee Trustee under such Trust Capital Securities
Guarantee. If the Guarantee Trustee fails to enforce such Trust Capital
Securities Guarantee, any holder of Trust Capital Securities relating to such
Trust Capital Securities Guarantee may institute a legal proceeding directly
against the Company to enforce the Guarantee Trustee's rights under such Trust
Capital Securities Guarantee, without first instituting a legal proceeding
against the relevant Trust, the Guarantee Trustee or any other person or entity.
In addition, any record holder of Trust Capital Securities relating to such
Trust Capital Securities Guarantee shall have the right, which is absolute and
unconditional, to proceed directly against the Company to obtain Guarantee
Payments thereunder, without first waiting to determine if the Guarantee Trustee
has enforced such Trust Capital Securities Guarantee or instituting a legal
proceeding against the Trust which issued such Trust Capital Securities, the
Guarantee Trustee or any other person or entity.
<PAGE>
16
STATUS OF THE TRUST CAPITAL SECURITIES GUARANTEES
Unless otherwise set forth in the applicable prospectus supplement, the
Trust Capital Securities Guarantees will constitute unsecured obligations of the
Company. The ranking of the Trust Capital Securities Guarantees, including
subordination, if any, will be set forth in the prospectus supplement relating
thereto. The terms of the Trust Capital Securities provide that each holder of
Trust Capital Securities issued by such Trust by acceptance thereof agrees to
the terms of the Trust Capital Securities Guarantee relating thereto.
The Trust Capital Securities Guarantees will constitute a guarantee of
payment and not of collection. This means the guaranteed party may institute a
legal proceeding directly against the guarantor to enforce its rights under the
guarantee without instituting a legal proceeding against any other person or
entity.
INFORMATION CONCERNING THE GUARANTEE TRUSTEE
The Guarantee Trustee, prior to the occurrence of a default with respect to
a Trust Capital Securities Guarantee, undertakes to perform only such duties as
are specifically set forth in such Trust Capital Securities Guarantee and, after
default, shall exercise the same degree of care as a prudent individual would
exercise in the conduct of his or her own affairs. Subject to such provisions,
the Guarantee Trustee is under no obligation to exercise any of the powers
vested in it by the Trust Capital Securities Guarantee at the request of any
holder of Trust Capital Securities, unless offered reasonable indemnity against
the costs, expenses and liabilities which might be incurred thereby.
The Guarantee Trustee may serve as trustee under other indentures pursuant
to which unsecured debt securities, including the Trust Debentures, of the
Company may be issued.
GOVERNING LAW
The Trust Capital Securities Guarantees will be governed by and construed
in accordance with the internal laws of the State of New York.
DESCRIPTION OF THE DEBT SECURITIES
GENERAL
The Debt Securities will be direct unsecured obligations of the Company and
may be senior Debt Securities ("Senior Debt Securities"), senior subordinated
Debt Securities ("Senior Subordinated Debt Securities") or junior subordinated
Debt Securities ("Junior Subordinated
<PAGE>
17
Debt Securities"). The Debt Securities will be issued under one or more
indentures, each dated as of a date prior to the issuance of the Debt Securities
to which the indenture relates. Senior Debt Securities, Senior Subordinated Debt
Securities and Junior Subordinated Debt Securities may be issued pursuant to
separate indentures (respectively, a "Senior Indenture", a "Senior Subordinated
Indenture" and a "Junior Subordinated Indenture"), in each case between the
Company and a trustee (the "Trustee"), which may be the same Trustee, and in the
form that has been filed as an exhibit to the Registration Statement of which
this prospectus is a part, subject to such amendments or supplements as may be
adopted from time to time. The Senior Indenture, the Senior Subordinated
Indenture and the Junior Subordinated Indenture, as amended or supplemented from
time to time, are sometimes hereinafter referred to individually as an
"Indenture" and collectively as the "Indentures." The Indentures will be subject
to and governed by the Trust Indenture Act of 1939, as amended (the "TIA"). The
statements made relating to the Debt Securities and the Indentures are summaries
of the anticipated provisions thereof, do not purport to be complete and are
qualified in their entirety by reference to the Indentures, the applicable
prospectus supplements and such Debt Securities.
Capitalized terms used herein and not defined shall have the meanings
assigned to them in the applicable Indenture.
TRUST DEBENTURES
The Company may issue Debt Securities to one or both of the Trusts ("Trust
Debentures") which would purchase such Debt Securities with the proceeds from
the issuance and sale of its Trust Common Securities and Trust Capital
Securities. The terms of Trust Debentures would be set forth in a prospectus
supplement.
If provided in the applicable prospectus supplement, in certain
circumstances, Trust Debentures purchased by a Trust may be distributed pro rata
to the holders of Trust Securities of such Trust in connection with the
dissolution of Trust upon the occurrence of certain events described in this
prospectus or in the prospectus supplement relating to the Trust Securities.
Only one series of Trust Debentures will be issued to each Trust or a Regular
Trustee of such Trust in connection with the issuance of Trust Securities by
such Trust.
If provided in the applicable prospectus supplement, the Company shall have
the right, at any time and from time to time during the term of the Trust
Debentures, to defer the payment of interest for such number of consecutive
interest payment periods as may be specified in the applicable prospectus
supplement, subject to the terms, conditions and covenants, if any, specified in
such prospectus supplement, provided that such extension period may not extend
beyond the stated maturity of the final installment of principal of the Trust
Debentures. Certain material United States federal income tax consequences and
special considerations applicable to the Trust Debentures will be described in
the applicable prospectus supplement.
<PAGE>
18
TERMS
The Debt Securities will be direct, unsecured obligations of the Company.
The indebtedness represented by Senior Subordinated Debt Securities or Junior
Subordinated Debt Securities will be subordinated in right of payment to the
prior payment in full of senior indebtedness of the Company. The particular
terms of the Debt Securities (including any Trust Debentures) offered by a
prospectus supplement and any applicable federal income tax considerations will
be described in the applicable prospectus supplement. Accordingly, for a
description of the terms of any series of Debt Securities, reference must be
made to both the prospectus supplement relating thereto and the description of
the Debt Securities set forth in this prospectus.
Except as set forth in any prospectus supplement, the Debt Securities may
be issued without limit as to aggregate principal amount, in one or more series.
Specific terms of each series of Debt Securities will be contained in
authorizing resolutions or a supplemental indenture and described in an
applicable prospectus supplement. All Debt Securities of one series need not be
issued at the same time and, unless otherwise provided, a series may be
reopened, without the consent of the holders of the Debt Securities of such
series, for issuance of additional Debt Securities of such series.
The prospectus supplement relating to the series of Debt Securities being
offered will describe the specific terms of the Debt Securities (including any
Trust Debentures). These terms may include some of the following:
(1) the title of such Debt Securities and whether such Debt
Securities are Senior Debt Securities, Senior Subordinated Debt
Securities or Junior Subordinated Debt Securities;
(2) the aggregate principal amount of such Debt Securities and any
limit on such aggregate principal amount;
(3) the price (expressed as a percentage of the principal amount
thereof) at which such Debt Securities will be issued and, if
other than the principal amount thereof, the portion of the
principal amount thereof payable upon declaration of acceleration
of the maturity thereof, or (if applicable) the portion of the
principal amount of such Debt Securities that is convertible into
Common Stock or Preferred Stock, and the method by which any such
portion shall be determined;
(4) if convertible or exchangeable, the terms on which such Debt
Securities are convertible or exchangeable, including the initial
conversion or exchange price or rate and the conversion or
exchange period and any
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19
applicable limitations on the ownership or transferability of the
Common Stock or Preferred Stock or other securities receivable on
conversion or exchange;
(5) the date(s), or the method for determining such date(s), on which
the principal of such Debt Securities will be payable;
(6) the rate(s) (which may be fixed or variable), or the method by
which such rate(s) shall be determined, at which such Debt
Securities will bear interest, if any;
(7) the date(s), or the method for determining such date(s), from
which any such interest will accrue, the date(s) on which any
such interest will be payable, the record date(s) for such
interest payments, or the method by which such date(s) shall be
determined, the persons to whom such interest shall be payable,
and the basis upon which interest shall be calculated if other
than that of a 360-day year of twelve 30-day months;
(8) the right, if any, of the Company to defer or extend the date(s)
on which interest shall be payable;
(9) the place(s) where the principal of and interest, if any, on such
Debt Securities will be payable, where such Debt Securities may
be surrendered for registration of transfer or exchange and where
notices or demands to or upon the Company in respect of such Debt
Securities and the applicable Indenture may be served;
(10) the period(s), if any, within which, the price(s) at which, and
the other terms and conditions upon which, such Debt Securities
may, pursuant to any optional or mandatory redemption provisions,
be redeemed, as a whole or in part, at the option of the Company;
(11) the obligation, if any, of the Company to redeem, repay or
purchase such Debt Securities pursuant to any sinking fund or
analogous provision or at the option of a holder thereof, and the
period(s) within which, the price or prices at which and the
other terms and conditions upon which such Debt Securities will
be redeemed, repaid or purchased, as a whole or in part, pursuant
to such obligation;
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20
(12) any changes to the Events of Default of the Company with respect
to Debt Securities of the series, whether or not such Events of
Default are consistent with the Events of Default described
herein;
(13) the applicability, if any, of the defeasance and covenant
defeasance provisions of the Indenture to the Debt Securities of
the series; and
(14) any other terms of the series (which terms shall not be
inconsistent with the provisions of the Indenture under which the
Debt Securities are issued).
If so provided in the applicable prospectus supplement, the Debt Securities
may be issued at a discount below their principal amount and provide for less
than the entire principal amount thereof to be payable upon declaration of
acceleration of the maturity thereof ("Original Issue Discount Securities"). In
such cases, all material U.S. federal income tax, accounting and other
considerations applicable to Original Issue Discount Securities will be
described in the applicable prospectus supplement.
Except as may be set forth in any prospectus supplement, the Debt
Securities will not contain any provisions that would limit the ability of the
Company to incur indebtedness or that would afford holders of Debt Securities
protection in the event of a highly leveraged or similar transaction involving
the Company or in the event of a change of control. The applicable prospectus
supplement will contain information with respect to any deletions from,
modifications of, or additions to, the events of default or covenants of the
Company that are described below, including any addition of a covenant or other
provision providing event risk or similar protection.
CERTAIN COVENANTS
The applicable prospectus supplement will describe any material covenants
to which a series of Debt Securities will be subject.
EVENTS OF DEFAULT, NOTICE AND WAIVER
The applicable prospectus supplement and each Indenture will provide the
events that constitute "Events of Default" with respect to any series of Debt
Securities issued thereunder, including the following:
(1) default in the payment of any interest on any Debt Security of
such series when such interest becomes due and payable that
continues for a period of 30 days;
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21
(2) default in the payment of the principal of any Debt Security of
such series when due and payable;
(3) default in the performance, or breach of any other covenant or
warranty of the Company in the applicable Indenture with respect
to the Debt Securities of such series and continuance of such
default or breach for a period of 90 days after written notice as
provided in the Indenture; and (4) any other event of default
provided with respect to a particular series of Debt Securities.
If an Event of Default under any Indenture occurs and is continuing, then
the applicable Trustee or the holders of not less than 25% in principal amount
of the Debt Securities of that series will have the right to declare the
principal amount (or, if the Debt Securities of that series are Original Issue
Discount Securities or indexed securities, such portion of the principal amount
as may be specified in the terms thereof) of all the Debt Securities of that
series to be due and payable immediately by written notice thereof to the
Company (and to the applicable Trustee if given by the holders). However, at any
time after such a declaration of acceleration with respect to Debt Securities of
such series has been made, but before a judgment or decree for payment of the
money due has been obtained by the applicable Trustee, the holders of not less
than a majority of the principal amount of outstanding Debt Securities of such
series may rescind and annul the acceleration if all conditions set forth in the
applicable Indenture are met. The Indentures also will provide that the holders
of not less than a majority of the principal amount of the outstanding Debt
Securities of any series may waive any past default with respect to such series
and its consequences, except a default (1) in the payment of the principal of or
interest on any Debt Security of such series or (2) in respect of a covenant or
provision contained in the applicable Indenture that cannot be modified or
amended without the consent of the holder of each outstanding Debt Security
affected thereby.
The Indentures will provide for other procedures that may be followed by
holders of Debt Securities, the Trustee of any series of Debt Securities, or
both, upon the occurrence of an Event of Default.
MODIFICATION OF THE INDENTURES
Modifications and amendments of an Indenture will be permitted only with
the consent of the holders of not less than a majority in principal amount of
all outstanding Debt Securities issued under such Indenture affected by such
modification or amendment. No such modification or amendment may, without the
consent of the holder of each such Debt Security affected thereby:
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22
(1) reduce the amount of Debt Securities whose holders must consent
to an amendment, supplement or waiver;
(2) reduce the rate of or change the time for payment of interest,
including defaulted interest, on any Debt Security;
(3) reduce the principal of or change the fixed maturity of any Debt
Security or alter the provisions (including related definitions)
with respect to redemption of Debt Securities or with respect to
any obligations on the part of the Company to offer to purchase
or to redeem Debt Securities;
(4) modify the ranking or priority of the Debt Securities or any
guarantee thereof;
(5) release any guarantor from any of its obligations under its
guarantee otherwise than in accordance with the terms of the
applicable Indenture;
(6) waive a continuing default or Event of Default in the payment of
the principal of or interest on any Debt Security; or
(7) make any Debt Security payable at a place or in money other than
that stated in the Debt Security, or impair the right of any
holder of Debt Securities to bring suit.
The holders of a majority in aggregate principal amount of the outstanding
Debt Securities of each series may, on behalf of all holders of Debt Securities
of that series, waive, insofar as that series is concerned, compliance by the
Company with certain restrictive covenants of the applicable Indenture.
Certain modifications and amendments of an Indenture will be permitted to
be made by the Company and the respective Trustee thereunder without the consent
of any holder of Debt Securities as set forth in the applicable Indenture and as
described in the applicable prospectus supplement.
SUBORDINATION
Senior Subordinated Debt Securities and Junior Subordinated Debt
Securities, if any, will be subject to the subordination provisions set forth in
the applicable prospectus supplement.
If this prospectus is being delivered in connection with a series of Senior
Subordinated Debt Securities and Junior Subordinated Debt Securities, the
accompanying prospectus supplement or the information incorporated herein by
reference will set forth the approximate amount
<PAGE>
23
of Senior Indebtedness (as defined in the applicable Indenture) outstanding as
of the end of the Company's most recent fiscal quarter.
DISCHARGE, DEFEASANCE AND COVENANT DEFEASANCE
Unless otherwise specified in the applicable prospectus supplement, when,
among other things, all Debt Securities of a series not previously delivered to
the applicable Trustee for cancellation (1) have become due and payable or (2)
will become due and payable at their stated maturity within one year, and the
Company deposits or causes to be deposited with such Trustee, as trust funds in
trust for the purpose, an amount in the currency or currencies in which such
series of Debt Securities are payable sufficient to pay and discharge the entire
indebtedness on such series of Debt Securities not previously delivered to such
Trustee for cancellation, for the principal (and premium, if any) and interest
to the date of the deposit or to the stated maturity, as the case may be, then
the applicable Indenture will cease to be of further effect with respect to such
series (except as to the Company's obligations to pay all other sums due
pursuant to such Indenture, rights of registration of transfer or exchange of
Debt Securities and rights with respect to temporary, and mutilated, lost or
destroyed Debt Securities), and the Company will be deemed to have satisfied and
discharged such Indenture with respect to such series.
The Indentures will provide that, unless otherwise indicated in the
applicable prospectus supplement, the Company may elect either (a) to defease
and be discharged from any and all obligations with respect to any series of
Debt Securities (except for the obligations to register the transfer or exchange
of such Debt Securities, to replace temporary or mutilated, destroyed, lost or
stolen Debt Securities, to maintain an office or agency in respect of such Debt
Securities, and to hold moneys for payment in trust) ("defeasance") or (b) to be
released from certain obligations with respect to such Debt Securities under the
applicable Indenture or, if provided in the applicable prospectus supplement,
its obligations with respect to any other covenant, and any omission to comply
with such obligations shall not constitute an Event of Default with respect to
such Debt Securities ("covenant defeasance"), in either case upon the
irrevocable deposit by the Company with the applicable Trustee, in trust, of an
amount, which through the scheduled payment of principal and interest in
accordance with their terms will provide money in an amount sufficient to pay
the principal of and interest on such Debt Securities, and any mandatory sinking
fund or analogous payments thereon, on the scheduled due dates therefor.
Such a trust will be permitted to be established only if, among other
conditions, the Company has delivered to the applicable Trustee an opinion of
counsel to the effect that the holders of such Debt Securities will not
recognize income, gain or loss for U.S. federal income tax purposes as a result
of such defeasance or covenant defeasance and will be subject to U.S. federal
income tax on the same amounts, in the same manner and at the same times as
would have been the case if such defeasance or covenant defeasance had not
occurred. In the event of such defeasance, the
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24
holders of such Debt Securities would thereafter be able to look only to such
trust fund for payment of principal and interest.
The applicable prospectus supplement may further describe the provisions
and additional conditions, if any, permitting such defeasance or covenant
defeasance, including any modifications to the provisions described above, with
respect to the Debt Securities or a particular series.
BOOK-ENTRY SYSTEM
The Debt Securities of a series may be issued in whole or in part in the
form of one or more global securities ("Global Securities"). Global Securities
will be deposited with, or on behalf of, a depository (the "Depository")
identified in the prospectus supplement relating to such series. Global
Securities, if any, issued in the United States are expected to be deposited
with The Depository Trust Company ("DTC"). Global Securities may be issued in
fully registered form and may be issued in either temporary or permanent form.
Unless and until it is exchanged in whole or in part for the individual Debt
Securities represented thereby, a Global Security may not be transferred except
as a whole by the Depository for such Global Security to a nominee of such
Depository or by a nominee of such Depository to such Depository or another
nominee of such Depository or by such Depository or any nominee of such
Depositor to a successor Depository or any nominee of such successor. The
specific terms of the depository arrangement with respect to a series of Debt
Securities will be described in the prospectus supplement relating to such
series.
PAYMENT AND PAYING AGENTS
Unless otherwise specified in the applicable prospectus supplement, the
principal of and interest on any series of Debt Securities will be payable at
the corporate trust office of the Trustee, the address of which will be stated
in the applicable prospectus supplement; provided that, at the option of the
Company, payment of interest may be made by check mailed to the address of the
person entitled thereto as it appears in the applicable register for such Debt
Securities or by wire transfer of funds to such person at an account maintained
within the United States.
All moneys paid by the Company to a paying agent or a Trustee for the
payment of the principal of or interest on any Debt Security which remain
unclaimed at the end of two years after such payment has become due and payable
will be repaid to the Company, and the holder of such Debt Security thereafter
may look only to the Company for payment thereof.
<PAGE>
25
RELATIONSHIP AMONG THE TRUST CAPITAL SECURITIES, THE TRUST
DEBENTURES AND THE TRUST CAPITAL SECURITIES GUARANTEE
As set forth in their respective Declarations, the sole purpose of each
Trust is to issue the Trust Securities evidencing undivided beneficial ownership
interests in the assets of such Trust, and to invest the proceeds from such
issuance and sale in the Trust Debentures.
As long as payments of interest and other payments are made when due on the
Trust Debentures, such payments will be sufficient to cover distributions and
payments due on the Trust Securities because of the following factors:
(1) the aggregate principal amount of Trust Debentures will be equal
to the sum of the aggregate stated liquidation amount of the
Trust Securities;
(2) the interest rate and the interest and other payment dates on the
Trust Debentures will match the distribution rate and
distribution and other payment dates for the Trust Capital
Securities;
(3) pursuant to the Debenture Indenture, the Company, as borrower,
shall pay, and neither of the Trusts shall be obligated to pay,
directly or indirectly, all of their respective costs, expenses,
debts and obligations (other than with respect to the Trust
Securities); and
(4) the Declaration of each Trust further provides that the Trustees
thereof shall not take or cause or permit such Trust to, among
other things, engage in any activity that is not consistent with
the purposes of such Trust.
Payments of distributions (to the extent funds therefor are available) and
other payments due on the Trust Capital Securities (to the extent funds therefor
are available) are guaranteed by the Company as and to the extent set forth
under "Description of the Trust Capital Securities Guarantee." If the Company
does not make interest payments on the Trust Debentures purchased by either of
the Trusts, it is expected that such Trust will not have sufficient funds to pay
distributions on its Trust Capital Securities. The Trust Capital Securities
Guarantee is a full guarantee with respect to the Trust Capital Securities
issued by the Trusts from the time of their issuance but does not apply to any
payment of distributions unless and until the Trust which has issued such Trust
Capital Securities has sufficient funds for the payment of such distributions.
The Trust Capital Securities Guarantee covers the payment of distributions and
other payments on the Trust Capital Securities only if and to the extent that
the Company has made a payment of interest or principal on the Trust Debentures
held by the Trust which has issued such Trust Capital Securities as its sole
asset. The Trust Capital Securities Guarantee, when taken together with the
<PAGE>
26
Company's obligations under the Trust Debentures, the Debenture Indenture and
the respective Declaration of each of the Trusts, including the Company's
obligations to pay costs, expenses, debts and liabilities of each of the Trusts
(other than with respect to the Trust Securities), provides a full and
unconditional guarantee of amounts payable on the Trust Capital Securities.
Notwithstanding anything to the contrary in the Debenture Indenture, the
Company has the right to set-off any payment it is otherwise required to make
under the Debenture Indenture with and to the extent the Company has already
made, or is concurrently on the date of such payment making, a payment under the
Trust Capital Securities Guarantee.
If the Guarantee Trustee fails to enforce the Trust Capital Securities
Guarantee, a holder of a Trust Capital Security may institute a legal proceeding
directly against the Company to enforce its rights under the Trust Capital
Securities Guarantee without first instituting a legal proceeding against the
Guarantee Trustee, the Trust which has issued such Trust Capital Securities or
any other person or entity.
The Trust Capital Securities of an issuing Trust evidence undivided
beneficial ownership interests in the assets of such Trust. A principal
difference between the rights of a holder of a Trust Capital Security and a
holder of a Trust Debenture is that a holder of a Trust Debenture will accrue,
and (subject to the permissible extension of the interest period) is entitled to
receive, interest on the principal amount of Trust Debentures held, while a
holder of Trust Capital Securities of either of the Trusts is entitled to
receive distributions only if and to the extent the Trust which has issued such
Trust Capital Security has funds available for the payment of such
distributions.
Upon any voluntary or involuntary dissolution of either of the Trusts
involving the liquidation of the Trust Debentures, the holders of Trust Capital
Securities of such Trust will be entitled to receive, out of assets held by such
Trust, the Liquidation Distribution in cash. See "Description of the Trust
Capital Securities." Upon any voluntary or involuntary liquidation or bankruptcy
of the Company, the Property Trustee as holder of the Trust Debentures would be
entitled to receive payment in full of principal and interest, before any
stockholders of the Company receive payments or distributions.
DESCRIPTION OF STOCK PURCHASE CONTRACTS
AND STOCK PURCHASE UNITS
The Company may issue Stock Purchase Contracts, including contracts
obligating holders to purchase from the Company, and the Company to sell to the
holders, a specified number of shares of Common Stock at a future date or dates
("Stock Purchase Contracts"). The consideration
<PAGE>
27
per share of Common Stock may be fixed at the time the Stock Purchase Contracts
are issued or may be determined by reference to a specific formula set forth in
the Stock Purchase Contracts. The Stock Purchase Contracts may be issued
separately or as part of units consisting of a Stock Purchase Contract and Debt
Securities, Trust Capital Securities or debt obligations of third parties,
including U.S. Treasury securities, securing the holders' obligations to
purchase the Common Stock under the Stock Purchase Contracts ("Stock Purchase
Units"). The Stock Purchase Contracts may require the Company to make periodic
payments to the holders of the Stock Purchase Units or vice versa, and such
payments may be unsecured or prefunded on some basis. The Stock Purchase
Contracts may require holders to secure their obligations thereunder in a
specified manner.
The applicable prospectus supplement will describe the terms of any Stock
Purchase Contracts or Stock Purchase Units. The description in the prospectus
supplement will not necessarily be complete, and reference will be made to the
Stock Purchase Contracts, and, if applicable, collateral or depositary
arrangements, relating to such Stock Purchase Contracts or Stock Purchase Units.
Certain material United States federal income tax considerations applicable to
the Stock Purchase Units and the Stock Purchase Contracts will be discussed in
the prospectus supplement relating thereto.
BOOK-ENTRY ISSUANCE
Unless otherwise specified in the applicable prospectus supplement, The
Depositary Trust Company ("DTC") will act as depositary for Securities issued in
the form of Global Securities. Such Securities will be issued only as
fully-registered securities registered in the name of Cede & Co. (DTC's
nominee). One or more fully-registered Global Securities will be issued for such
Securities representing in the aggregate the total number of such Securities,
and will be deposited with or on behalf of DTC.
DTC is a limited purpose trust company organized under the New York Banking
Law, a "banking organization" within the meaning of the New York Banking Law, a
member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Exchange Act. DTC
holds securities that its Participants deposit with DTC. DTC also facilitates
the settlement among Participants of securities transactions, such as transfers
and pledges, in deposited securities through electronic computerized book-entry
changes in Participants' accounts, thereby eliminating the need for physical
movement of securities certificates. Direct Participants include securities
brokers and dealers, banks, trust companies, clearing corporations and certain
other organizations ("Direct Participants"). DTC is owned by a number of its
Direct Participants and by the New York Stock Exchange, Inc., the American Stock
Exchange,
<PAGE>
28
Inc. and the National Association of Securities Dealers, Inc. Access to the DTC
system is also available to others such as securities brokers and dealers, banks
and trust companies that clear through or maintain custodial relationships with
Direct Participants, either directly or indirectly ("Indirect Participants").
The rules applicable to DTC and its Participants are on file with the
Commission.
Purchases of Securities within the DTC system must be made by or through
Direct Participants, which will receive a credit for such Securities on DTC's
records. The ownership interest of each actual purchaser of each Security
("Beneficial Owner") is in turn to be recorded on the Direct and Indirect
Participants' records. Beneficial Owners will not receive written
confirmation from DTC of their purchases, but Beneficial Owners are expected
to receive written confirmations providing details of the transactions, as
well as periodic statements of their holdings, from the Direct or Indirect
Participants through which the Beneficial Owners purchased Securities.
Transfers of ownership interests in Securities issued in the form of Global
Securities are to be accomplished by entries made on the books of
Participants acting on behalf of Beneficial Owners. Beneficial Owners will
not receive certificates representing their ownership interests in such
Securities, except in the event that use of the book-entry system for such
Securities is discontinued.
DTC has no knowledge of the actual Beneficial Owners of the Securities
issued in the form of Global Securities. DTC's records reflect only the identity
of the Direct Participants to whose accounts such Securities are credited, which
may or may not be the Beneficial Owners. The Participants will remain
responsible for keeping account of their holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect Participants to Beneficial Owners will be governed by
arrangements among them, subject to any statutory or regulatory requirements as
may be in effect from time to time.
Redemption notices shall be sent to Cede & Co. as the registered holder of
Securities issued in the form of Global Securities. If less than all of a series
of such Securities are being redeemed, DTC's current practice is to determine by
lot the amount of the interest of each Direct Participant to be redeemed.
Although voting with respect to Securities issued in the form of Global
Securities is limited to the holders of record of such Securities, in those
instances in which a vote is required, neither DTC nor Cede & Co. will itself
consent or vote with respect to such Securities. Under its usual procedures, DTC
would mail an omnibus proxy (the "Omnibus Proxy") to the issuer of such
Securities as soon as possible after the record date. The Omnibus Proxy assigns
Cede &
<PAGE>
29
Co.'s consenting or voting rights to those Direct Participants to whose accounts
such Securities are credited on the record date (identified in a listing
attached to the Omnibus Proxy).
Payments in respect of Securities issued in the form of Global Securities
will be made by the issuer of such Securities to DTC. DTC's practice is to
credit Direct Participants' accounts on the relevant payment date in accordance
with their respective holdings shown on DTC's records unless DTC has reason to
believe that it will not receive payments on such payment date. Payments by
Participants to Beneficial Owners will be governed by standing instructions and
customary practices and will be the responsibility of such Participant and not
of DTC, the Institutional Trustee, either Trust or the Company, subject to any
statutory or regulatory requirements as may be in effect from time to time.
Payments to DTC are the responsibility of the issuer of the applicable
Securities, disbursement of such payments to Direct Participants is the
responsibility of DTC, and disbursements of such payments to the Beneficial
Owners is the responsibility of Direct and Indirect Participants.
DTC may discontinue providing its services as depositary with respect to
any Securities at any time by giving reasonable notice to the issuer of such
Securities. In the event that a successor depositary is not obtained, individual
Security certificates representing such Securities are required to be printed
and delivered. The Company, at its option, may decide to discontinue use of the
system of book-entry transfers through DTC (or a successor depositary).
The information in this section concerning DTC and DTC's book-entry system
has been obtained from sources that the Trust and the Company believe to be
accurate, but the Trust and the Company assume no responsibility for the
accuracy thereof. Neither the Trust nor the Company has any responsibility for
the performance by DTC or its Participants of their respective obligations as
described herein or under the rules and procedures governing their respective
operations.
PLAN OF DISTRIBUTION
Any of the securities being offered hereby (the "Securities") may be sold
in any one or more of the following ways from time to time: (i) through agents;
(ii) to or through underwriters; (iii) through dealers; and (iv) directly by the
Company or, in the case of Trust Capital Securities, by a Trust to purchasers.
The distribution of the Securities may be effected from time to time in one
or more transactions at a fixed price or prices, which may be changed, at market
prices prevailing at the time of sale, at prices related to such prevailing
market prices or at negotiated prices.
<PAGE>
30
Offers to purchase Securities may be solicited by agents designated by the
Company from time to time. Any such agent involved in the offer or sale of the
Securities in respect of which this prospectus is delivered will be named, and
any commissions payable by the Company or the Trusts to such agent will be set
forth, in the applicable prospectus supplement. Unless otherwise indicated in
such prospectus supplement, any such agent will be acting on a reasonable best
efforts basis for the period of its appointment. Any such agent may be deemed to
be an underwriter, as that term is defined in the Securities Act, of the
Securities so offered and sold.
If Securities are sold by means of an underwritten offering, the Company
and, in the case of an offering of Trust Capital Securities, the Trust will
execute an underwriting agreement with an underwriter or underwriters at the
time an agreement for such sale is reached, and the names of the specific
managing underwriter or underwriters, as well as any other underwriters, the
respective amounts underwritten and the terms of the transaction, including
commissions, discounts and any other compensation of the underwriters and
dealers, if any, will be set forth in the applicable prospectus supplement which
will be used by the underwriters to make resales of the Securities in respect of
which this prospectus is being delivered to the public. If underwriters are
utilized in the sale of any Securities in respect of which this prospectus is
being delivered, such Securities will be acquired by the underwriters for their
own account and may be resold from time to time in one or more transactions,
including negotiated transactions, at fixed public offering prices or at varying
prices determined by the underwriters at the time of sale. Securities may be
offered to the public either through underwriting syndicates represented by
managing underwriters or directly by one or more underwriters. If any
underwriter or underwriters are utilized in the sale of Securities, unless
otherwise indicated in the applicable prospectus supplement, the underwriting
agreement will provide that the obligations of the underwriters are subject to
certain conditions precedent and that the underwriters with respect to a sale of
such Securities will be obligated to purchase all such Securities if any are
purchased.
The Company or the Trusts, as applicable, may grant to the underwriters
options to purchase additional Securities, to cover over-allotments, if any, at
the initial public offering price (with additional underwriting commissions or
discounts), as may be set forth in the prospectus supplement relating thereto.
If the Company or the Trusts, as applicable, grant any over-allotment option,
the terms of such over-allotment option will be set forth in the prospectus
supplement for such Securities.
If a dealer is utilized in the sale of the Securities in respect of which
this prospectus is delivered, the Company or the Trusts, as applicable, will
sell such Securities to the dealer as principal. The dealer may then resell such
Securities to the public at varying prices to be determined by such dealer at
the time of resale. Any such dealer may be deemed to be an underwriter, as such
term is defined in the Securities Act, of the Securities so offered and sold.
The name of the dealer and the terms of the transaction will be set forth in the
prospectus supplement relating thereto.
<PAGE>
31
Offers to purchase Securities may be solicited directly by the Company or
the Trusts, as applicable, and the sale thereof may be made by the Company or
the Trusts directly to institutional investors or others, who may be deemed to
be underwriters within the meaning of the Securities Act with respect to any
resale thereof. The terms of any such sales will be described in the prospectus
supplement relating thereto.
Securities may also be offered and sold, if so indicated in the applicable
prospectus supplement, in connection with a remarketing upon their purchase, in
accordance with a redemption or repayment pursuant to their terms, or otherwise,
by one or more firms ("remarketing firms"), acting as principals for their own
accounts or as agents for the Company or the Trust, as applicable. Any
remarketing firm will be identified and the terms of its agreement, if any, with
the Company or the Trusts and its compensation will be described in the
applicable prospectus supplement. Remarketing firms may be deemed to be
underwriters, as that term is defined in the Securities Act, in connection with
the Securities remarketed thereby.
If so indicated in the applicable prospectus supplement, the Company or the
Trusts, as applicable, may authorize agents and underwriters to solicit offers
by certain institutions to purchase Securities from the Company or the Trusts at
the public offering price set forth in the applicable prospectus supplement
pursuant to delayed delivery contracts providing for payment and delivery on the
date or dates stated in the applicable prospectus supplement. Such delayed
delivery contracts will be subject to only those conditions set forth in the
applicable prospectus supplement. A commission indicated in the applicable
prospectus supplement will be paid to underwriters and agents soliciting
purchases of Securities pursuant to delayed delivery contracts accepted by the
Company or the Trusts, as applicable.
Agents, underwriters, dealers and remarketing firms may be entitled under
relevant agreements with the Company or the Trusts, as applicable, to
indemnification by the Company or the Trusts against certain liabilities,
including liabilities under the Securities Act, or to contribution with respect
to payments which such agents, underwriters, dealers and remarketing firms may
be required to make in respect thereof.
Each series of Securities will be a new issue and, other than the Common
Stock, which is listed on the New York Stock Exchange, will have no established
trading market. The Company may elect to list any series of Securities on an
exchange, and in the case of the Common Stock, on any additional exchange, but,
unless otherwise specified in the applicable prospectus supplement, the Company
shall not be obligated to do so. No assurance can be given as to the liquidity
of the trading market for any of the Securities.
Agents, underwriters, dealers and remarketing firms may be customers of,
engage in transactions with, or perform services for, the Company and its
subsidiaries in the ordinary course of business.
<PAGE>
32
LEGAL MATTERS
The validity of the Trust Capital Securities will be passed upon on behalf
of MDC and the Trusts by Prickett, Jones, Elliot, Kristol & Schnee, Wilmington,
Delaware, special Delaware counsel to MDC and the Trusts. The validity of the
Common Stock, the Preferred Stock, the Trust Debentures, the Trust Capital
Securities Guarantee, the Debt Securities, the Stock Purchase Contracts and
Stock Purchase Units and certain matters relating thereto will be passed upon
for MDC and the Trusts by Holme Roberts & Owen LLP, Denver, Colorado. Certain
legal maters will be passed on for any underwriters, agents and dealers by
Cahill Gordon & Reindel (a partnership including a professional corporation),
New York, New York.
EXPERTS
The financial statements incorporated in this prospectus by reference to
the Annual Report on Form 10-K for the year ended December 31, 1997, have been
so incorporated in reliance on the report of PricewaterhouseCoopers LLP,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth all expenses payable by the Company in
connection with the issuance and distribution of the Securities, other than
underwriting discounts and commissions. The Company will bear all of such
expenses. All the amounts shown are estimates, except the registration fee.
<TABLE>
<CAPTION>
<S> <C>
Registration
Fee.......................................................................$
Fees and expenses of accountants................................................
Fees and expenses of counsel to the Company.....................................
Fees and expenses of Trustees and counsel.......................................
Printing and engraving..........................................................
Blue Sky fees and expenses (including counsel...................................
NYSE Listing fee................................................................
Rating agency fees..............................................................
Miscellaneous...................................................................
Total..........................................................................$
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The By-Laws and Certificates of Incorporation of the Company provide for
indemnification of the officers and directors of those corporations to the
fullest extent permitted by applicable law. The governing documents of the other
Co-Registrants do not provide for the indemnification of directors or officers
against any liability which they may incur in their capacities as such.
Section 145 of the Delaware General Corporation Law provides in part that a
corporation shall have the power to indemnify any person who was or is a party
or is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding (other than an action by or in the right of the
corporation) by reason of the fact that such person is or was a director,
officer, employee or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee or agent of another
corporation or other enterprise, against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
by him in connection with such action, suit or proceeding if he acted in good
faith and in a manner he reasonably believed to be in or not opposed to the best
interests of the corporation, and with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful. Similar
indemnity is authorized for such persons against expenses (including attorneys'
fees) actually and reasonably incurred in defense or settlement of any
threatened, pending or completed action or suit by or in the right of the
corporation, if such
<PAGE>
2
person acted in good faith and in a manner he reasonably believed to be in or
not opposed to the best interests of the corporation, and provided further
(unless a court of competent jurisdiction otherwise provides) such person shall
not have been adjudged liable to the corporation. Any such indemnification may
be made only as authorized in each specific case upon a determination by the
stockholders or disinterested directors that indemnification is proper because
the indemnitee has met the applicable standard of conduct.
Additionally, the Certificates of Incorporation of the Company eliminates
in certain circumstances the monetary liability of directors for breach of their
fiduciary duty as directors. This provision does not eliminate the liability of
a director (i) for a breach of the director's duty of loyalty to the respective
corporation or its stockholders; (ii) for acts or omissions by the director not
in good faith or which involve intentional misconduct or a knowing violation of
law; (iii) for liability arising under Section 174 of the Delaware General
Corporation Law (relating to the declaration of dividends and purchase or
redemption of shares in violation of the Delaware General Corporation Law); or
(iv) for any transaction from which the director derived an improper personal
benefit.
The Company has obtained Directors and Officers Liability Insurance that
provides insurance coverage for certain liabilities that may be incurred by the
directors and officers of the Company and the Co-Registrants in their capacity
as such.
The Amended and Restated Declaration of Trust for each of the Trusts will
provide for the indemnification by the sponsor of such Trust, of a trustee, any
affiliate of a trustee, any officers, directors, shareholders, members,
partners, employees, representatives or agents of a trustee, or any employee or
agent of the Trusts or their affiliates.
ITEM 16. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBITS
<S> <C>
1.1* Form of Underwriting Agreement.
4.1** Form of Certificate for shares of the Company's common stock.
4.2++ Form of Certificate for shares of the Company's preferred stock.
4.3*** Form of Senior Indenture by and between M.D.C. Holdings, Inc.
and ____________________, as Trustee, including a
form of senior debt security.
4.4*** Form of Senior Subordinated Indenture by and between M.D.C.
Holdings, Inc. and ___________________, as Trustee,
including a form of senior subordinated debt security.
4.5*** Form of Junior Subordinated Indenture by and between M.D.C.
Holdings, Inc. and ___________________, as Trustee,
including a
</TABLE>
<PAGE>
3
<TABLE>
<CAPTION>
<S> <C>
form of junior subordinated debt security.
4.6+ Certificate of Trust of MDC Capital Funding Trust I.
4.7+ Declaration of Trust of MDC Capital Funding Trust I
4.8+ Certificate of Trust of MDC Capital Funding Trust II.
4.9+ Declaration of Trust of MDC Capital Funding Trust II
4.10+ Form of Amended and Restated Declaration
of Trust for each of MDC Capital Funding
Trust I and MDC Capital Funding Trust II,
including a form of Trust Capital Security
Certificate and Trust Common Security
Certificate.
4.11+ Form of Capital Securities Guarantee Agreement with respect to the
Trust Capital Securities of each of MDC Capital
Funding Trust I and MDC Capital Funding Trust II.
4.12+ Form of Common Securities Guarantee Agreement with respect to the
Trust Common Securities of each of MDC Capital
Funding Trust I and MDC Capital Funding Trust II.
4.13++ Form of Purchase Contract Agreement.
5.1++ Opinion of Holme Roberts & Owen LLP.
5.2++ Opinion of Prickett, Jones, Elliot, Kristol & Schnee, as to the validity
of the Trust Capital Securities.
12.1++ Computation of ratios of earnings to fixed charges.
23.1+ Consent of Independent Accountants.
23.2++ Consent of Holme Roberts & Owen LLP (included in Exhibit 5.1).
23.3++ Consent of Prickett, Jones, Elliot, Kristol & Schnee (included in Exhibit 5.2).
24+ Powers of Attorney (included on the signature pages hereof).
25.1+ Form T-1 Statement of Eligibility of The First National Bank of Chicago, as
Property Trustee for MDC Capital Funding Trust I.
25.2+ Form T-1 Statement of Eligibility of The First National Bank of Chicago, as
Property Trustee for MDC Capital Funding Trust II.
25.3+ Form T-1 Statement of Eligibility of The First National Bank of Chicago, as
Guarantee Trustee under the Trust Capital Securities Guarantee Agreements
for each of MDC Capital Funding Trust I and MDC Capital Funding Trust II.
</TABLE>
* The Company will file any underwriting agreement that it may enter into as
an exhibit to a Current Report on Form 8-K which is incorporated by
reference into this Registration Statement.
** Filed as an exhibit to the Company's Registration Statement on Form S-3,
Registration No. 33-426, and incorporated herein by reference.
<PAGE>
4
*** Filed as an exhibit to the Company's Registration Statement on Form S-3,
Registration No. 33-36631, and incorporated herein by reference.
+ Filed herewith.
++ To be filed by amendment.
ITEM 17. UNDERTAKINGS.
(a) The Company hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or
the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the registration
statement; notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or
high end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate,
the changes in volume and price represent no more than a
20 percent change in the maximum aggregate offering price
set forth in the "Calculation of Registration Fee" table
in the effective registration statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
registration statement is on Form S-3, Form S-8 or Form F-3, and the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed with or furnished to the Commission by the
Company pursuant to Section 13 or Section 15(d) of the Exchange Act that are
incorporated by reference in the registration statement.
<PAGE>
5
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be
deemed to be a new registration statement relating to the
securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which
remain unsold at the termination of the offering.
(4) For purposes of determining any liability under the
Securities Act, the information omitted from the form of
prospectus filed as part of this registration statement in
reliance upon Rule 430A and contained in a form of
prospectus filed by the registrant pursuant to Rule
424(b)(1) or (4) or 497(h) under the Securities Act shall be
deemed to be part of this registration statement as of the
time it was declared effective.
(5) For the purpose of determining any liability under the
Securities Act, each post-effective amendment that contains
a form of prospectus shall be deemed to be a new
registration statement relating to the securities offered
therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering
thereof.
(b) The Company hereby undertakes that, for purposes of determining any
liability under the Securities Act, each filing of the Company's
annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement relating
to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling
persons of the Company pursuant to any charter provision, by-law,
contract, arrangement, statute, or otherwise, the Company has been
advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act and is,
therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by
the Company of expenses incurred or paid by a director, officer or
controlling person of the Company in the successful defense of any
action, suit or proceeding) is asserted against the Company by such
director, officer or controlling person in
<PAGE>
6
connection with the securities being registered, the Company will,
unless in the opinion of counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction
the question of whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the
final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
M.D.C. Holdings, Inc. certifies that it has reasonable grounds to believe that
it meets all of the requirements for filing on Form S-3 and have duly caused
this Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Denver, State of Colorado, on the 7th
day of January, 1999.
M.D.C. HOLDINGS, INC.
By: /s/ PARIS G. REECE III
----------------------------
Paris G. Reece III
Senior Vice President
POWER OF ATTORNEY
Each of the undersigned constitutes and appoints Paris G. Reece III,
Michael Touff and Daniel S. Japha, and each of them, as attorneys for him and in
his name, place, and stead, and in his capacity as a Director, Officer, or both,
of the Company and/or any of the co-registrants, to execute and file any amended
registration statement or statements or supplements thereto (including any
post-effective amendments, including any registration statement filed under Rule
462(b) under the Securities Act of 1933), with all exhibits thereto and other
documents in connection therewith, with the Securities and Exchange Commission,
hereby giving and granting to said attorneys full power and authority to do and
perform all and every act and thing whatsoever requisite and necessary to be
done in and about the premises as fully, to all intents and purposes, as he or
she might or could do if personally present at the doing thereof, hereby
ratifying and confirming all that said attorneys may or shall lawfully do, or
cause to be done, by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement or amendment thereto has been signed by the following
persons in the capacities indicated , on the 7th day of January, 1999.
<PAGE>
7
MDC OFFICERS AND DIRECTORS
Principal Executive Officer:
/s/ LARRY A. MIZEL
---------------------------------
Larry A. Mizel,
Chairman of the Board of Directors,
President and Chief Executive Officer
Chief Operating Officer:
/s/ DAVID D. MANDARICH
---------------------------------
David D. Mandarich,
Director, Executive Vice President -
Real Estate and Chief Operating Officer
Principal Financial and Accounting
Officer:
/s/ PARIS G. REECE III
---------------------------------
Paris G. Reece III,
Senior Vice President,
Chief Financial Officer and
Principal Accounting Officer
Other Directors:
/s/ STEVEN J. BORICK
---------------------------------
Steven J. Borick
/s/ WILLIAM B. KEMPER
---------------------------------
William B. Kemper
<PAGE>
8
/s/ HERBERT T. BUCHWALD
---------------------------------
Herbert T. Buchwald
SIGNATURE
Pursuant to the requirements of the Securities Act of 1933, this
registration statement or amendment thereto has been signed by the following in
the capacity indicated , on the 7th day of January, 1999.
/s/ GILBERT GOLDSTEIN
---------------------------------
Gilbert Goldstein
Director
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, each of
MDC Capital Funding Trust I and MDC Capital Funding Trust II certifies that it
has reasonable grounds to believe that it meets all the requirements for filing
on Form S-3 and has duly caused this Registration Statement on Form S-3 to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Denver, State of Colorado, on the 7th day of January, 1999.
MDC Capital Funding Trust I
MDC Capital Funding Trust II
By: DANIEL S. JAPHA
---------------------------------
Daniel S. Japha
Regular Trustee
<PAGE>
Exhibit 4.6
CERTIFICATE OF TRUST OF
MDC CAPITAL FUNDING TRUST I
THIS Certificate of Trust of MDC Capital Funding Trust I (the "Trust"),
dated January 8, 1999, is being duly executed and filed by First Chicago
Delaware Inc., a Delaware corporation, as trustee, and Daniel S. Japha, as
trustee, to form a business trust under the Delaware Business Trust Act (12
DEL.C. Section 3801 ET SEQ.).
1. NAME. The name of the business trust formed hereby is MDC Capital
Funding Trust I.
2. DELAWARE TRUSTEE. The name and business address of the trustee of
the Trust in the State of Delaware is First Chicago Delaware Inc., 300 King
Street, Wilmington, New Castle County, Delaware 19801.
3. EFFECTIVE DATE. This Certificate of Trust shall be effective upon
filing.
<PAGE>
IN WITNESS WHEREOF, the undersigned, being all of the trustees of the
Trust, have executed this Certificate of Trust as of the date first-above
written.
FIRST CHICAGO DELAWARE INC.
as trustee
By: /s/ Steven M. Wagner
---------------------------
Name: Steven M. Wagner
----------------------
Title: Vice President
---------------------
/s/ Daniel S. Japha
------------------------------
Daniel S. Japha
as Trustee
<PAGE>
Exhibit 4.7
DECLARATION OF TRUST
OF
MDC CAPITAL FUNDING TRUST I
This Declaration of Trust, dated as of January 8, 1999 between M.D.C.
Holdings, Inc., a Delaware corporation, as "Sponsor", and Daniel S. Japha, as
"Regular Trustee" and First Chicago Delaware Inc. as "Delaware Trustee" (the
Delaware Trustee and the Regular Trustee together, the "Trustees"). The
Sponsor and the Trustees hereby agree as follows:
1. The trust created hereby shall be known as MDC CAPITAL FUNDING
TRUST I (the "Trust"), in which name the Trustees or the Sponsor, to the
extent provided herein, may conduct the business of the Trust, make and
execute contracts, and sue and be sued.
2. The Sponsor hereby assigns, transfers, conveys and sets over to the
Trust the sum of $10. The Trustees hereby acknowledge receipt of such amount
from the Sponsor, which amount shall constitute the initial trust estate.
The Trustees hereby declare that they will hold the trust estate for the
Sponsor. It is the intention of the parties hereto that the Trust created
hereby constitute a business trust under Chapter 38 of Title 12 of the
Delaware Code, 12 DEL. C. Section 3801 ET SEQ. (the "Business Trust Act"),
and that this document constitutes the governing instrument of the Trust.
The Trustees are hereby authorized and directed to execute and file a
certificate of trust with the Delaware Secretary of State in accordance with
the provisions of the Business Trust Act.
3. The Sponsor and the Trustees will enter into an amended and
restated Declaration of Trust, satisfactory to each such party and
substantially in the form to be included as an exhibit to the 1933 Act
Registration Statement (as defined below), to provide for the contemplated
operation of the Trust created hereby and the issuance of the Capital
Securities and Common Securities referred to therein. Prior to the execution
and delivery of such amended and restated Declaration of Trust, the Trustees
shall not have any duty or obligation hereunder or with respect to the trust
estate, except as otherwise required by applicable law or as may be necessary
to obtain prior to such execution and delivery any licenses, consents or
approvals required by applicable law or otherwise.
4. The Sponsor and the Regular Trustee hereby authorize and direct the
Sponsor, as the sponsor of the Trust, (i) to file with the Securities and
Exchange Commission (the "Commission") and execute, in each case on behalf of
the Trust (a) the Registration Statement on Form S-3 (the "1933 Act
Registration Statement"), including any pre-effective or post-effective
amendments to such 1933 Act Registration Statement (including the prospectus
and the exhibits contained therein), relating to the registration under the
Securities Act of 1933, as amended, of the Common Securities and Capital
Securities of the Trust and certain other securities and any other necessary
documents relating thereto and (b) a Registration Statement on Form 8-A (the
"1934 Act Registration Statement") (including all pre-effective and
post-effective amendments thereto) relating to the registration of the
Capital Securities of the Trust under Section 12 of the Securities Exchange
Act of 1934, as amended; (ii) to file with one or more national securities
exchange (each, an "Exchange") or the National Association of Securities
Dealers ("NASD") and execute on behalf of the Trust a listing application or
applications and all other
<PAGE>
applications, statements, certificates, agreements and other instruments as
shall be necessary or desirable to cause the Capital Securities and Common
Securities to be listed on any such Exchange or the NASD's Nasdaq National
Market ("NASDAQ"); (iii) to file and execute on behalf of the Trust such
applications, reports, surety bonds, irrevocable consents, appointments of
attorney for service of process and other papers and documents as the
Sponsor, on behalf of the Trust, may deem necessary or desirable to register
the Capital Securities and Common Securities under the securities or "Blue
Sky" laws; (iv) to execute on behalf of the Trust such Underwriting
Agreements with one or more underwriters relating to the offering of the
Capital Securities as the Sponsor, on behalf of the Trust, may deem necessary
or desirable; (v) to execute and deliver letters or documents to, or
instruments for filing with, a depository relating to the Capital Securities
of the Trust; and (vi) to execute, deliver and perform on behalf of the Trust
one or more purchase agreements, dealer/manager agreements, escrow
agreements, registration rights agreements and other related agreements
providing for or relating to the sale of the Capital Securities and Common
Securities of the Trust. In the event that any filing referred to in clauses
(i), (ii) and (iii) above is required by the rules and regulations of the
Commission, any Exchange, the NASD or state securities or Blue Sky laws, to
be executed on behalf of the Trust by one of the Trustees, the Sponsor and
any of the Trustees appointed pursuant to Section 6 hereof are hereby
authorized to join in any such filing and to execute on behalf of the Trust
any and all of the foregoing. It being understood that First Chicago
Delaware Inc., in its capacity as Trustee of the Trust, shall not be required
to join in any such filing or execute on behalf of the Trust any such
document unless required by the rules and regulations of the Commission, the
NASD or any other national stock exchange or state securities or blue sky
laws.
5. This Declaration of Trust may be executed in one or more
counterparts.
6. The number of Trustees initially shall be two (2) and thereafter
the number of Trustees shall be such number as shall be fixed from time to
time by a written instrument signed by the Sponsor which may increase or
decrease the number of Trustees; provided, however, that to the extent
required by the Business Trust Act, one Trustee shall either be a natural
person who is a resident of the State of Delaware or, if not a natural
person, an entity which has its principal place of business in the State of
Delaware and otherwise meets the requirements of applicable Delaware law.
Subject to the foregoing, the Sponsor is entitled to appoint or remove
without cause any of the Trustees at any time. Any of the Trustees may
resign upon thirty days' prior notice to the Sponsor PROVIDED, HOWEVER, such
notice shall not be required if it is waived by the Sponsor.
7. First Chicago Delaware Inc., in its capacity as Trustee, shall not
have any of the powers or duties of the trustees set forth herein and shall
be a Trustee of the Trust for the sole purpose of satisfying the requirements
of Section 3807(a) of the Business Trust Act.
8. This Declaration of Trust shall be governed by, and construed in
accordance with, the laws of the State of Delaware (without regard to
conflict of laws principles).
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Declaration of
Trust to be duly executed as of the day and year first above written.
M.D.C. HOLDINGS, INC.,
as Sponsor
By: /s/ Daniel S. Japha
---------------------------
Name: Daniel S. Japha
----------------------
Title: Secretary
---------------------
FIRST CHICAGO DELAWARE INC.,
as Trustee
By: /s/ Steven M. Wagner
---------------------------
Name: Steven M. Wagner
----------------------
Title: Vice President
---------------------
/s/ Daniel S. Japha
------------------------------
Daniel S. Japha
as Regular Trustee
<PAGE>
Exhibit 4.8
CERTIFICATE OF TRUST OF
MDC CAPITAL FUNDING TRUST II
THIS Certificate of Trust of MDC Capital Funding Trust II (the "Trust"),
dated January 8, 1999, is being duly executed and filed by First Chicago
Delaware Inc., a Delaware corporation, as trustee, and Daniel S. Japha, as
trustee, to form a business trust under the Delaware Business Trust Act
(12 DEL.C. Section 3801 ET SEQ.).
1. NAME. The name of the business trust formed hereby is MDC Capital
Funding Trust II.
2. DELAWARE TRUSTEE. The name and business address of the trustee of
the Trust in the State of Delaware is First Chicago Delaware Inc., 300 King
Street, Wilmington, New Castle County, Delaware 19801.
3. EFFECTIVE DATE. This Certificate of Trust shall be effective upon
filing.
<PAGE>
IN WITNESS WHEREOF, the undersigned, being all of the trustees of the
Trust, have executed this Certificate of Trust as of the date first-above
written.
FIRST CHICAGO DELAWARE INC.
as trustee
By: /s/ Steven M. Wagner
---------------------------
Name: Steven M. Wagner
----------------------
Title: Vice President
---------------------
/s/ Daniel S. Japha
------------------------------
Daniel S. Japha
as Trustee
<PAGE>
Exhibit 4.9
DECLARATION OF TRUST
OF
MDC CAPITAL FUNDING TRUST II
This Declaration of Trust, dated as of January 8, 1999 between M.D.C.
Holdings, Inc., a Delaware corporation, as "Sponsor", and Daniel S. Japha, as
"Regular Trustee" and First Chicago Delaware Inc. as "Delaware Trustee" (the
Delaware Trustee and the Regular Trustee together, the "Trustees"). The
Sponsor and the Trustees hereby agree as follows:
1. The trust created hereby shall be known as MDC CAPITAL FUNDING
TRUST II (the "Trust"), in which name the Trustees or the Sponsor, to the
extent provided herein, may conduct the business of the Trust, make and
execute contracts, and sue and be sued.
2. The Sponsor hereby assigns, transfers, conveys and sets over to the
Trust the sum of $10. The Trustees hereby acknowledge receipt of such amount
from the Sponsor, which amount shall constitute the initial trust estate.
The Trustees hereby declare that they will hold the trust estate for the
Sponsor. It is the intention of the parties hereto that the Trust created
hereby constitute a business trust under Chapter 38 of Title 12 of the
Delaware Code, 12 DEL. C. Section 3801 ET SEQ. (the "Business Trust Act"),
and that this document constitutes the governing instrument of the Trust.
The Trustees are hereby authorized and directed to execute and file a
certificate of trust with the Delaware Secretary of State in accordance with
the provisions of the Business Trust Act.
3. The Sponsor and the Trustees will enter into an amended and
restated Declaration of Trust, satisfactory to each such party and
substantially in the form to be included as an exhibit to the 1933 Act
Registration Statement (as defined below), to provide for the contemplated
operation of the Trust created hereby and the issuance of the Capital
Securities and Common Securities referred to therein. Prior to the execution
and delivery of such amended and restated Declaration of Trust, the Trustees
shall not have any duty or obligation hereunder or with respect to the trust
estate, except as otherwise required by applicable law or as may be necessary
to obtain prior to such execution and delivery any licenses, consents or
approvals required by applicable law or otherwise.
4. The Sponsor and the Regular Trustee hereby authorize and direct the
Sponsor, as the sponsor of the Trust, (i) to file with the Securities and
Exchange Commission (the "Commission") and execute, in each case on behalf of
the Trust (a) the Registration Statement on Form S-3 (the "1933 Act
Registration Statement"), including any pre-effective or post-effective
amendments to such 1933 Act Registration Statement (including the prospectus
and the exhibits contained therein), relating to the registration under the
Securities Act of 1933, as amended, of the Common Securities and Capital
Securities of the Trust and certain other securities and any other necessary
documents relating thereto and (b) a Registration Statement on Form 8-A (the
"1934 Act Registration Statement") (including all pre-effective and
post-effective amendments thereto) relating to the registration of the
Capital Securities of the Trust under Section 12 of the Securities Exchange
Act of 1934, as amended; (ii) to file with one or more national securities
exchange (each, an "Exchange") or the National Association of Securities
Dealers ("NASD") and execute on behalf of the Trust a listing application or
applications and all other
<PAGE>
applications, statements, certificates, agreements and other instruments as
shall be necessary or desirable to cause the Capital Securities and Common
Securities to be listed on any such Exchange or the NASD's Nasdaq National
Market ("NASDAQ"); (iii) to file and execute on behalf of the Trust such
applications, reports, surety bonds, irrevocable consents, appointments of
attorney for service of process and other papers and documents as the
Sponsor, on behalf of the Trust, may deem necessary or desirable to register
the Capital Securities and Common Securities under the securities or "Blue
Sky" laws; (iv) to execute on behalf of the Trust such Underwriting
Agreements with one or more underwriters relating to the offering of the
Capital Securities as the Sponsor, on behalf of the Trust, may deem necessary
or desirable; (v) to execute and deliver letters or documents to, or
instruments for filing with, a depository relating to the Capital Securities
of the Trust; and (vi) to execute, deliver and perform on behalf of the Trust
one or more purchase agreements, dealer/manager agreements, escrow
agreements, registration rights agreements and other related agreements
providing for or relating to the sale of the Capital Securities and Common
Securities of the Trust. In the event that any filing referred to in clauses
(i), (ii) and (iii) above is required by the rules and regulations of the
Commission, any Exchange, the NASD or state securities or Blue Sky laws, to
be executed on behalf of the Trust by one of the Trustees, the Sponsor and
any of the Trustees appointed pursuant to Section 6 hereof are hereby
authorized to join in any such filing and to execute on behalf of the Trust
any and all of the foregoing. It being understood that First Chicago
Delaware Inc., in its capacity as Trustee of the Trust, shall not be required
to join in any such filing or execute on behalf of the Trust any such
document unless required by the rules and regulations of the Commission, the
NASD or any other national stock exchange or state securities or blue sky
laws.
5. This Declaration of Trust may be executed in one or more
counterparts.
6. The number of Trustees initially shall be two (2) and thereafter
the number of Trustees shall be such number as shall be fixed from time to
time by a written instrument signed by the Sponsor which may increase or
decrease the number of Trustees; provided, however, that to the extent
required by the Business Trust Act, one Trustee shall either be a natural
person who is a resident of the State of Delaware or, if not a natural
person, an entity which has its principal place of business in the State of
Delaware and otherwise meets the requirements of applicable Delaware law.
Subject to the foregoing, the Sponsor is entitled to appoint or remove
without cause any of the Trustees at any time. Any of the Trustees may
resign upon thirty days' prior notice to the Sponsor PROVIDED, HOWEVER, such
notice shall not be required if it is waived by the Sponsor.
7. First Chicago Delaware Inc., in its capacity as Trustee, shall not
have any of the powers or duties of the trustees set forth herein and shall
be a Trustee of the Trust for the sole purpose of satisfying the requirements
of Section 3807(a) of the Business Trust Act.
8. This Declaration of Trust shall be governed by, and construed in
accordance with, the laws of the State of Delaware (without regard to
conflict of laws principles).
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Declaration of
Trust to be duly executed as of the day and year first above written.
M.D.C. HOLDINGS, INC.,
as Sponsor
By: /s/ Daniel S. Japha
---------------------------
Name: Daniel S. Japha
----------------------
Title: Secretary
---------------------
FIRST CHICAGO DELAWARE INC.,
as Trustee
By: /s/ Steven M. Wagner
---------------------------
Name: Steven M. Wagner
----------------------
Title: Vice President
---------------------
/s/ Daniel S. Japha
------------------------------
Daniel S. Japha
as Regular Trustee
<PAGE>
Exhibit 4.10
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
AMENDED AND RESTATED DECLARATION OF TRUST
MDC CAPITAL FUNDING TRUST [ ]
Dated as of
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
ARTICLE I INTERPRETATION AND DEFINITIONS.....................................................2
SECTION 1.1. Definitions.........................................................................2
ARTICLE II TRUST INDENTURE ACT................................................................9
SECTION 2.1. Trust Indenture Act; Application....................................................9
SECTION 2.2. Lists of Holders of Securities......................................................9
SECTION 2.3. Reports by the Property Trustee....................................................10
SECTION 2.4. Periodic Reports to Property Trustee...............................................10
SECTION 2.5. Evidence of Compliance with Conditions Precedent...................................10
SECTION 2.6. Events of Default; Waiver..........................................................10
SECTION 2.7. Event of Default; Notice...........................................................12
ARTICLE III ORGANIZATION......................................................................13
SECTION 3.1. Name...............................................................................13
SECTION 3.2. Office.............................................................................13
SECTION 3.3. Purpose............................................................................14
SECTION 3.4. Authority..........................................................................14
SECTION 3.5. Title to Property of the Trust.....................................................14
SECTION 3.6. Powers and Duties of the Regular Trustees..........................................14
SECTION 3.7. Prohibition of Actions by the Trust and the Trustees...............................18
SECTION 3.8. Powers and Duties of the Property Trustee..........................................19
SECTION 3.9. Certain Duties and Responsibilities of the Property Trustee........................21
SECTION 3.10. Certain Rights of the Property Trustee.............................................23
SECTION 3.11. Delaware Trustee...................................................................25
SECTION 3.12. Execution of Documents.............................................................26
SECTION 3.13. Not Responsible for Recitals or Issuance of Securities.............................26
SECTION 3.14. Duration of Trust..................................................................26
SECTION 3.15. Mergers............................................................................26
ARTICLE IV SPONSOR...........................................................................28
SECTION 4.1. Sponsor's Purchase of Common Securities............................................28
SECTION 4.2. Responsibilities of the Sponsor....................................................28
SECTION 4.3. Expenses...........................................................................29
</TABLE>
i
<PAGE>
<TABLE>
<S> <C> <C>
ARTICLE V TRUSTEES..........................................................................30
SECTION 5.1. Number of Trustees.................................................................30
SECTION 5.2. Delaware Trustee...................................................................31
SECTION 5.3. Property Trustee; Eligibility......................................................31
SECTION 5.4. Qualifications of Regular Trustees and Delaware Trustee Generally..................32
SECTION 5.5. Initial Trustees...................................................................32
SECTION 5.6. Appointment, Removal and Resignation of Trustees...................................33
SECTION 5.7. Vacancies Among Trustees...........................................................34
SECTION 5.8. Effect of Vacancies................................................................34
SECTION 5.9. Meetings...........................................................................35
SECTION 5.10. Delegation of Power................................................................35
ARTICLE VI DISTRIBUTIONS.....................................................................36
SECTION 6.1. Distributions......................................................................36
ARTICLE VII ISSUANCE OF SECURITIES............................................................36
SECTION 7.1. General Provisions Regarding Securities............................................36
ARTICLE VIII DISSOLUTION OF TRUST..............................................................38
SECTION 8.1. Dissolution of Trust...............................................................38
ARTICLE IX TRANSFER OF INTERESTS.............................................................39
SECTION 9.1. Transfer of Securities.............................................................39
SECTION 9.2. Transfer of Certificates...........................................................39
SECTION 9.3. Deemed Security Holders............................................................40
SECTION 9.4. Book Entry Interests...............................................................40
SECTION 9.5. Notices to Clearing Agency.........................................................41
SECTION 9.6. Appointment of Successor Clearing Agency...........................................41
SECTION 9.7. Definitive Capital Security Certificates...........................................41
SECTION 9.8. Mutilated, Destroyed, Lost or Stolen Certificates..................................42
ARTICLE X LIMITATION OF LIABILITY OF HOLDERS OF SECURITIES, TRUSTEES OR OTHERS................43
SECTION 10.1. Liability..........................................................................43
SECTION 10.2. Exculpation........................................................................44
SECTION 10.3. Fiduciary Duty.....................................................................44
SECTION 10.4. Indemnification and Reimbursement..................................................45
SECTION 10.5. Outside Businesses.................................................................46
</TABLE>
ii
<PAGE>
<TABLE>
<S> <C> <C>
ARTICLE XI ACCOUNTING........................................................................47
SECTION 11.1. Fiscal Year........................................................................47
SECTION 11.2. Certain Accounting Matters.........................................................47
SECTION 11.3. Banking............................................................................48
SECTION 11.4. Withholding........................................................................48
ARTICLE XII AMENDMENTS AND MEETINGS...........................................................49
SECTION 12.1. Amendments.........................................................................49
SECTION 12.2. Meetings of the Holders; Action by Written Consent.................................51
ARTICLE XIII REPRESENTATIONS OF PROPERTY TRUSTEE AND DELAWARE TRUSTEE..........................53
SECTION 13.1. Representations and Warranties of Property Trustee.................................53
SECTION 13.2. Representations and Warranties of Delaware Trustee.................................54
ARTICLE XIV MISCELLANEOUS.....................................................................55
SECTION 14.1. Notices............................................................................55
SECTION 14.2. Governing Law......................................................................56
SECTION 14.3. Intention of the Parties...........................................................56
SECTION 14.4. Headings...........................................................................56
SECTION 14.5. Successors and Assigns.............................................................56
SECTION 14.6. Partial Enforceability.............................................................56
SECTION 14.7. Counterparts.......................................................................57
ANNEX I TERMS OF SECURITIES...................................................................I-1
EXHIBIT A-1 FORM OF CAPITAL SECURITY CERTIFICATE.................................................A1-1
EXHIBIT A-2 FORM OF COMMON SECURITY CERTIFICATE..................................................A2-1
EXHIBIT B SPECIMEN OF SUBORDINATED NOTE.........................................................B-1
</TABLE>
iii
<PAGE>
CROSS-REFERENCE TABLE*
<TABLE>
<CAPTION>
SECTION OF
TRUST INDENTURE ACT SECTION OF
OF 1939, AS AMENDED DECLARATION
<S> <C>
310(a) ........................................... 5.3(a)
310(b) ........................................... 5.3(c), 5.3(d)
310(c) ........................................... Inapplicable
311(a) ........................................... 2.2(b)
311(b) ........................................... 2.2(b)
311(c) ........................................... Inapplicable
312(a) ........................................... 2.2(a)
312(b) ........................................... 2.2(b)
313 ........................................... 2.3
314(a) ........................................... 2.4
314(b) ........................................... Inapplicable
314(c) ........................................... 2.5
314(d) ........................................... Inapplicable
314(e) ........................................... 1.1, 2.5
314(f) ........................................... Inapplicable
315(a) ........................................... 3.9(b)
315(c) ........................................... 3.9(a)
315(d) ........................................... 3.9(b)
316(a) ........................................... Annex I
316(c) ........................................... 3.6(e)
317(a) ........................................... 3.8(d)
317(b) ........................................... 3.8(h)
</TABLE>
- -------------------
* This Cross-Reference Table does not constitute part of the Declaration and
shall not affect the interpretation of any of its terms or provisions.
<PAGE>
AMENDED AND RESTATED DECLARATION OF TRUST
OF
MDC CAPITAL FUNDING TRUST [ ]
AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration"),
dated and effective as of [ ], [ ], by the Trustees (as defined
herein), the Sponsor (as defined herein) and by the holders, from time to
time, of undivided beneficial interests in the assets of the Trust to be
issued pursuant to this Declaration.
W I T N E S S E T H:
WHEREAS, the Trustees and the Sponsor created MDC Capital
Funding Trust [ ] (the "Trust") as a business trust under the Delaware
Business Trust Act pursuant to a Declaration of Trust dated as of [ ],
[ ] (the "Original Declaration") and a Certificate of Trust filed with the
Secretary of State of the State of Delaware on [ ], [ ] for the
exclusive purposes of issuing and selling certain securities representing
undivided beneficial interests in the assets of the Trust, investing the
proceeds thereof in certain Trust Debentures of the Trust Debenture Issuer
(as defined herein) and engaging in activities necessary or incidental
thereto;
WHEREAS, prior to the date hereof, no interests in the Trust
have been issued; and
WHEREAS, all of the Trustees and the Sponsor, by this
Declaration, amend and restate each and every term and provision of the Original
Declaration.
NOW, THEREFORE, it being the intention of the parties hereto
to continue the Trust as a business trust under the Business Trust Act and that
this Declaration constitute the governing instrument of such business trust, the
Trustees declare that all assets contributed to the Trust will be held in trust
for the benefit of the holders, from time to time, of the securities
representing undivided beneficial interests in the assets of the Trust issued
hereunder, subject to the provisions of this Declaration.
<PAGE>
2
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1. DEFINITIONS.
Unless the context otherwise requires:
(a) capitalized terms used in this Declaration but not defined
in the preamble above have the respective meanings assigned to them in
this Section 1.1;
(b) a term defined anywhere in this Declaration has the same
meaning throughout;
(c) all references to "the Declaration" or "this Declaration"
are to this Declaration as modified, supplemented or amended from time
to time;
(d) all references in this Declaration to Articles and
Sections and Annexes and Exhibits are to Articles and Sections of and
Annexes and Exhibits to this Declaration unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same
meaning when used in this Declaration unless otherwise defined in this
Declaration or unless the context otherwise requires; and
(f) a reference in this Declaration to the singular includes
the plural and vice versa.
"AFFILIATE" has the same meaning as given to that term in Rule
405 of the Securities Act or any successor rule thereunder.
"AUTHORIZED OFFICER" of a Person means any Person that is
authorized to bind such Person.
"BOOK ENTRY INTEREST" means a beneficial interest in a Global
Certificate, ownership and transfers of which shall be maintained and made
through book entries by a Clearing Agency as described in Section 9.4.
"BUSINESS DAY" means any day other than a Saturday, a Sunday
or any other day on which banking institutions in New
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York, New York or Denver, Colorado, or the New York Stock Exchange are
authorized or required by law to close.
"BUSINESS TRUST ACT" means Chapter 38 of Title 12 of the
Delaware Code, 12 DEL. CODE Section 3801 ET SEQ., as it may be amended from time
to time.
"CAPITAL SECURITIES GUARANTEE" means the guarantee agreement,
dated as of [ ], [ ] of the Sponsor in respect of the Capital
Securities.
"CAPITAL SECURITY" has the meaning specified in Section 7.1.
"CAPITAL SECURITY BENEFICIAL OWNER" means, with respect to a
Book Entry Interest, a Person who is the beneficial owner of such Book Entry
Interest, as reflected on the books of the Clearing Agency, or on the books of a
Person maintaining an account with such Clearing Agency (directly as a Clearing
Agency Participant or as an indirect participant, in each case in accordance
with the rules of such Clearing Agency).
"CAPITAL SECURITY CERTIFICATE" means a certificate
representing a Capital Security substantially in the form of Exhibit A-1.
"CERTIFICATE" means a Common Security Certificate or a Capital
Security Certificate.
"CLEARING AGENCY" means an organization registered as a
"clearing agency" pursuant to Section 17A of the Exchange Act that is acting as
depositary for the Capital Securities and in whose name or in the name of a
nominee of that organization shall be registered a Global Certificate and which
shall undertake to effect book entry transfers and pledges of the Capital
Securities.
"CLEARING AGENCY PARTICIPANT" means a broker, dealer, bank or
other financial institution or other Person for whom from time to time the
Clearing Agency effects book entry transfers and pledges of securities deposited
with the Clearing Agency.
"CLOSING DATE" means [ ].
"CODE" means the Internal Revenue Code of 1986 as amended from
time to time, or any successor legislation.
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"COMMISSION" means the Securities and Exchange Commission.
"COMMON SECURITIES GUARANTEE" means the guarantee agreement,
dated as of [ ], [ ] of the Sponsor in respect of the Common
Securities.
"COMMON SECURITY" has the meaning specified in Section 7.1.
"COMMON SECURITY CERTIFICATE" means a definitive certificate
in fully registered form representing a Common Security substantially in the
form of Exhibit A-2.
"COVERED PERSON" means: (a) any officer, director,
shareholder, partner, member, representative, employee or agent of (i) the Trust
or (ii) the Trust's Affiliates; and (b) any Holder of Securities.
"DELAWARE TRUSTEE" has the meaning set forth in Section 5.2.
"DEFINITIVE CAPITAL SECURITY CERTIFICATES" has the meaning set
forth in Section 9.4.
"DIRECTION" by a Person means a written direction signed:
(a) if the Person is a natural Person, by that Person; or
(b) in any other case, in the name of such Person by one or
more Authorized Officers of that Person.
"DISTRIBUTION" means a distribution payable to Holders of
Securities in accordance with Section 6.1.
"DTC" means The Depository Trust Company, the initial Clearing
Agency.
"EVENT OF DEFAULT" in respect of the Securities means an Event
of Default (as defined in the Indenture) has occurred and is continuing in
respect of the Trust Debentures.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended from time to time, or any successor legislation.
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"GLOBAL CERTIFICATE" has the meaning set forth in Section 9.4.
"HOLDER" means a Person in whose name a Certificate
representing a Security is registered, such Person being a beneficial owner
within the meaning of the Business Trust Act.
"INDEMNIFIED PERSON" means (a) any Trustee; (b) any Affiliate
of any Trustee; (c) any officers, directors, shareholders, members, partners,
employees, representatives or agents of any Trustee; or (d) any employee or
agent of the Trust or its Affiliates.
"INDENTURE" means the Indenture dated as of [ ],
between the Trust Debenture Issuer and the Trust Debenture Trustee, and any
further indentures supplemental thereto relating to the Trust Debentures.
"INVESTMENT COMPANY" means an investment company (as defined
in the Investment Company Act) that is required to register as such under the
Investment Company Act.
"INVESTMENT COMPANY ACT" means the Investment Company Act of
1940, as amended from time to time, or any successor legislation.
"INVESTMENT COMPANY EVENT" has the meaning set forth in Annex
I hereto.
"LEGAL ACTION" has the meaning set forth in Section 3.6(g).
"MAJORITY IN LIQUIDATION AMOUNT OF THE SECURITIES" means,
except as provided in the terms of the Capital Securities and by the Trust
Indenture Act, Holder(s) of outstanding Securities voting together as a single
class or, as the context may require, Holders of outstanding Capital Securities
or Holders of outstanding Common Securities voting separately as a class, who
are the record owners of more than 50% of the aggregate liquidation amount
(including the stated amount that would be paid on redemption, liquidation or
otherwise, plus accrued and unpaid Distributions to the date upon which the
voting percentages are determined) of all outstanding Securities of the relevant
class.
"MINISTERIAL ACTION" has the meaning set forth in the terms of
the Securities as set forth in Annex I.
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"OFFICERS' CERTIFICATE" means, with respect to any Person, a
certificate signed by two Authorized Officers of such Person. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Declaration shall include:
(a) a statement that each officer signing the Certificate has
read the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the
examination or investigation undertaken by each officer in rendering
the Certificate;
(c) a statement that each such officer has made such
examination or investigation as, in such officer's opinion, is
necessary to enable such officer to express an informed opinion as to
whether or not such covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such
officer, such condition or covenant has been complied with.
"PAYING AGENT" has the meaning specified in Section 3.8(h).
"PERSON" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association or
government or any agency or political subdivision of a government, or any other
entity of whatever nature.
"PROPERTY TRUSTEE" means the Trustee meeting the eligibility
requirements set forth in Section 5.3.
"PROPERTY TRUSTEE ACCOUNT" has the meaning set forth in
Section 3.8(c).
"QUORUM" means a majority of the Regular Trustees or, if there
are only two Regular Trustees, both of them.
"REGULAR TRUSTEE" means any Trustee other than the Property
Trustee and the Delaware Trustee.
"RELATED PARTY" means, with respect to the Sponsor, any direct
or indirect wholly owned subsidiary of the Sponsor
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or any other Person that owns, directly or indirectly, 100% of the outstanding
voting securities of the Sponsor.
"RESPONSIBLE OFFICER" means, with respect to the Property
Trustee, (a) any vice president, the secretary, any assistant vice president,
any assistant secretary, the treasurer, any assistant treasurer, any trust
officer or assistant trust officer or any other officer in the corporate trust
department of the Property Trustee customarily performing functions similar to
those performed by any of the above designated officers and also means, with
respect to a particular corporate trust matter, any other officer to whom such
matter is referred because of that officer's knowledge of and familiarity with
the particular subject and (b) who shall have direct responsibility for the
administration of this Declaration.
"RULE 3A-7" means Rule 3a-7 under the Investment Company Act.
"SECURITIES" means the Common Securities and the Capital
Securities.
"SECURITIES ACT" means the Securities Act of 1933, as amended
from time to time, or any successor legislation.
"SECURITIES GUARANTEES" means the Capital Securities Guarantee
and the Common Securities Guarantee.
"SPECIAL EVENT" has the meaning set forth in Annex I hereto.
"SPONSOR" means M.D.C. Holdings, Inc., a Delaware corporation,
or any successor entity in a merger, consolidation or amalgamation, in its
capacity as sponsor of the Trust.
"SUPER MAJORITY" has the meaning set forth in Section
2.6(a)(ii).
"TAX EVENT" has the meaning set forth in Annex I hereto.
"10% IN LIQUIDATION AMOUNT OF THE SECURITIES" means, except as
provided in the terms of the Capital Securities or by the Trust Indenture Act,
Holders of outstanding Securities voting together as a single class or, as the
context may require, Holders of outstanding Capital Securities or Holders of
outstanding Common Securities, voting separately as a class, representing 10% of
the aggregate liquidation amount (including
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the stated amount that would be paid on redemption, liquidation or otherwise,
plus accrued and unpaid Distributions to the date upon which the voting
percentages are determined) of all outstanding Securities of the relevant class.
"TREASURY REGULATIONS" means the income tax regulations,
including temporary and proposed regulations, promulgated under the Code by the
United States Treasury, as such regulations may be amended from time to time
(including corresponding provisions of succeeding regulations).
"TRUST DEBENTURE ISSUER" means the Sponsor in its capacity as
issuer of the Trust Debentures.
"TRUST DEBENTURE TRUSTEE" means [ ], as trustee
under the Indenture until a successor is appointed thereunder, and thereafter
means such successor trustee.
"TRUST DEBENTURES" means the [ ]% Trust Debentures Due
[ ] to be issued by the Trust Debenture Issuer under the Indenture
and held by the Property Trustee. A specimen certificate representing a Trust
Debenture is attached hereto as Exhibit B. The Trust Debentures will be
subordinate and junior in right of payment to certain other indebtedness of
the Trust Debenture Issuer as set forth in the Indenture.
"TRUSTEE" or "TRUSTEES" means each Person who has signed this
Declaration as a trustee, so long as such Person shall continue in office in
accordance with the terms hereof, and all other Persons who may from time to
time be duly appointed, qualified and serving as Trustees in accordance with the
provisions hereof, and references herein to a Trustee or the Trustees shall
refer to such Person or Persons solely in their capacity as trustees hereunder.
"TRUST INDENTURE ACT" means the Trust Indenture Act of 1939,
as amended to the date hereof.
"UNDERWRITING AGREEMENT" means the underwriting agreement
among the Trust, the Trust Debenture Issuer and the underwriters designated by
the Regular Trustees with respect to the offer and sale of the Capital
Securities.
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ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1. TRUST INDENTURE ACT; APPLICATION.
(a) This Declaration is subject to the provisions of the Trust
Indenture Act that are required to be part of this Declaration and shall, to the
extent applicable, be governed by such provisions.
(b) The Property Trustee shall be the only Trustee that is a
Trustee for the purposes of the Trust Indenture Act.
(c) If and to the extent that any provision of this
Declaration limits, qualifies or conflicts with the duties imposed by
Sections 310 to 317, inclusive, of the Trust Indenture Act, such imposed duties
shall control.
(d) The application of the Trust Indenture Act to this
Declaration shall not affect the nature of the Securities as equity securities
representing undivided beneficial interests in the assets of the Trust.
SECTION 2.2. LISTS OF HOLDERS OF SECURITIES.
(a) Each of the Sponsor and the Regular Trustees on behalf of
the Trust shall provide the Property Trustee (i) within 14 days after each
record date for payment of Distributions, a list, in such form as the Property
Trustee may reasonably require, of the names and addresses of the Holders of the
Securities ("List of Holders") as of such record date, PROVIDED that neither the
Sponsor nor the Regular Trustees on behalf of the Trust shall be obligated to
provide such List of Holders at any time the List of Holders does not differ
from the most recent List of Holders given to the Property Trustee by the
Sponsor and the Regular Trustees on behalf of the Trust, and (ii) at any other
time, within 30 days of receipt by the Trust of a written request therefor, a
List of Holders as of a date no more than 14 days before such List of Holders is
given to the Property Trustee. The Property Trustee shall preserve, in as
current a form as is reasonably practicable, all information contained in Lists
of Holders given to it or which it receives in the capacity of Paying Agent (if
acting in such capacity); PROVIDED that the Property Trustee may destroy any
List of Holders previously given to it on receipt of a new List of Holders.
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(b) The Property Trustee shall comply with its obligations
under Sections 311(a), 311(b) and 312(b) of the Trust Indenture Act.
SECTION 2.3. REPORTS BY THE PROPERTY TRUSTEE.
Within 60 days after December 31 of each year or at such other
time as required under Section 313(b) of the Trust Indenture Act, the Property
Trustee shall provide to the Holders of the Securities such reports as are
required by Section 313 of the Trust Indenture Act, if any, in the form and in
the manner provided by Section 313 of the Trust Indenture Act. The Property
Trustee shall also comply with the requirements of Section 313(d) of the Trust
Indenture Act.
SECTION 2.4. PERIODIC REPORTS TO PROPERTY TRUSTEE.
Each of the Sponsor and the Regular Trustees on behalf of the
Trust shall provide to the Property Trustee such documents, reports and
information as required by Section 314 of the Trust Indenture Act (if any) and
the compliance certificate required by Section 314 of the Trust Indenture Act in
the form, in the manner and at the times required by Section 314 of the Trust
Indenture Act.
SECTION 2.5. Evidence of Compliance with Conditions PRECEDENT.
Each of the Sponsor and the Regular Trustees on behalf of the
Trust shall provide to the Property Trustee such evidence of compliance with any
conditions precedent, if any, provided for in this Declaration that relate to
any of the matters set forth in Section 314(c) of the Trust Indenture Act. Any
certificate or opinion required to be given by an officer pursuant to Section
314(c)(1) of the Trust Indenture Act may be given in the form of an Officers'
Certificate.
SECTION 2.6. EVENTS OF DEFAULT; WAIVER.
(a) The Holders of a Majority in liquidation amount of Capital
Securities may, by vote, on behalf of the Holders of all of the Capital
Securities, waive any past Event of Default in respect of the Capital Securities
and its consequences, PROVIDED that, if the underlying Event of Default under
the Indenture:
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(i) is not waivable under the Indenture, the Event of Default
under the Declaration shall also not be waivable; or
(ii) requires the consent or vote of greater than a majority
in principal amount of the holders of the Trust Debentures (a "Super
Majority") to be waived under the Indenture, the Event of Default under
the Declaration may be waived only by the vote of the Holders of at
least the proportion in liquidation amount of the Capital Securities
outstanding that the relevant Super Majority represents of the
aggregate principal amount of the Trust Debentures outstanding.
The foregoing provisions of this Section 2.6(a) shall be in
lieu of Section 316(a)(1)(B) of the Trust Indenture Act and such Section
316(a)(1)(B) of the Trust Indenture Act is hereby expressly excluded from this
Declaration and the Securities, as permitted by the Trust Indenture Act. Upon
such waiver, any such default shall cease to exist, and any Event of Default
with respect to the Capital Securities arising therefrom shall be deemed to have
been cured, for every purpose of this Declaration, but no such waiver shall
extend to any subsequent or other default or Event of Default with respect to
the Capital Securities or impair any right consequent thereon. Any waiver by the
Holders of the Capital Securities of an Event of Default with respect to the
Capital Securities shall also be deemed to constitute a waiver by the Holders of
the Common Securities of any such Event of Default with respect to the Common
Securities for all purposes of this Declaration without any further act, vote,
or consent of the Holders of the Common Securities.
(b) The Holders of a Majority in liquidation amount of the
Common Securities may, by vote, on behalf of the Holders of all of the Common
Securities, waive any past Event of Default with respect to the Common
Securities and its consequences, PROVIDED that, if the underlying Event of
Default under the Indenture:
(i) is not waivable under the Indenture, except where the
Holders of the Common Securities are deemed to have waived such Event
of Default under the Declaration as provided below in this Section
2.6(b), the Event of Default under the Declaration shall also not be
waivable; or
(ii) requires the consent or vote of a Super Majority to be
waived, except where the Holders of the Common Securities are deemed to
have waived such Event of Default under the Declaration as provided
below in this Section 2.6(b), the Event of Default
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under the Declaration may be waived only by the vote of the Holders of
at least the proportion in liquidation amount of the Common Securities
outstanding that the relevant Super Majority represents of the
aggregate principal amount of the Trust Debentures outstanding;
PROVIDED, FURTHER, that each Holder of Common Securities will be deemed to have
waived any such Event of Default and all Events of Default with respect to the
Common Securities and their consequences until all Events of Default with
respect to the Capital Securities have been cured, waived or otherwise
eliminated, and until such Events of Default have been so cured, waived or
otherwise eliminated, the Property Trustee will be deemed to be acting solely on
behalf of the Holders of the Capital Securities and only the Holders of the
Capital Securities will have the right to direct the Property Trustee in
accordance with the terms of the Securities. The foregoing provisions of this
Section 2.6(b) shall be in lieu of Sections 316(a)(1)(A) and 316(a)(1)(B) of the
Trust Indenture Act and such Sections 316(a)(1)(A) and 316(a)(1)(B) of the Trust
Indenture Act are hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act. Subject to the foregoing
provisions of this Section 2.6(b), upon such waiver, any such default shall
cease to exist and any Event of Default with respect to the Common Securities
arising therefrom shall be deemed to have been cured for every purpose of this
Declaration, but no such waiver shall extend to any subsequent or other default
or Event of Default with respect to the Common Securities or impair any right
consequent thereon.
(c) A waiver of an Event of Default under the Indenture by the
Property Trustee at the direction of the Holders of the Capital Securities
constitutes a waiver of the corresponding Event of Default under this
Declaration. The foregoing provisions of this Section 2.6(c) shall be in lieu of
Section 316(a)(1)(B) of the Trust Indenture Act and such Section 316(a)(1)(B) of
the Trust Indenture Act is hereby expressly excluded from this Declaration and
the Securities, as permitted by the Trust Indenture Act.
SECTION 2.7. EVENT OF DEFAULT; NOTICE.
(a) The Property Trustee shall, within 90 days after the
occurrence of an Event of Default, transmit by mail, first class postage
prepaid, to the Holders of the Securities, notices of all defaults with respect
to the Securities actually
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known to a Responsible Officer of the Property Trustee, unless such defaults
have been cured before the giving of such notice (the term "defaults" for the
purposes of this Section 2.7(a) being hereby defined to be an Event of Default
as defined in the Indenture, not including any periods of grace provided for
therein and irrespective of the giving of any notice provided therein); PROVIDED
that, except for a default in the payment of principal of (or premium, if any)
or interest on any of the Trust Debentures, the Property Trustee shall be
protected in withholding such notice if and so long as the board of directors,
the executive committee, or a trust committee of directors and/or Responsible
Officers of the Property Trustee in good faith determines that the withholding
of such notice is in the interests of the Holders of the Securities.
(b) The Property Trustee shall not be deemed to have knowledge
of any default except:
(i) a default under Sections 6.01(a) and 6.01(b) of the
Indenture; or
(ii) any default as to which a Responsible Officer shall have
actual knowledge or a Responsible Officer charged with the
administration of the Declaration shall have obtained written notice.
ARTICLE III
ORGANIZATION
SECTION 3.1. NAME.
The Trust is named "MDC Capital Funding Trust I," as such name
may be modified from time to time by the Regular Trustees following written
notice to the Holders of the Securities. The Trust's activities may be conducted
under the name of the Trust or any other name deemed advisable by the Regular
Trustees.
SECTION 3.2. OFFICE.
The address of the principal office of the Trust is c/o M.D.C.
Holdings, Inc., 3600 S. Yosemite Street, Suite 900, Denver, Colorado 80237. On
ten Business Days' written notice to the Holders of the Securities, the Regular
Trustees may designate another principal office.
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SECTION 3.3. PURPOSE.
The exclusive purposes and functions of the Trust are (a) to
issue and sell the Securities and use the proceeds from such sale to purchase
and hold the Trust Debentures and the Capital Securities Guarantee, and (b)
except as otherwise limited herein, to engage in only those other activities
necessary, or incidental thereto. The Trust shall not borrow money, issue debt
or reinvest proceeds derived from investments, pledge any of its assets, or
otherwise undertake (or permit to be undertaken) any activity that would cause
the Trust not to be classified for United States federal income tax purposes as
a grantor trust.
SECTION 3.4. AUTHORITY.
Subject to the limitations provided in this Declaration and to
the specific duties of the Property Trustee, the Regular Trustees shall have
exclusive and complete authority to carry out the purposes of the Trust. An
action taken by the Regular Trustees in accordance with their powers shall
constitute the act of and serve to bind the Trust, and an action taken by the
Property Trustee in accordance with its powers shall constitute the act of and
serve to bind the Trust. In dealing with the Trustees acting on behalf of the
Trust, no person shall be required to inquire into the authority of the Trustees
to bind the Trust. Persons dealing with the Trust are entitled to rely
conclusively on the power and authority of the Trustees as set forth in this
Declaration.
SECTION 3.5. TITLE TO PROPERTY OF THE TRUST.
Except as provided in Section 3.8 with respect to the Trust
Debentures and the Property Trustee Account or as otherwise provided in this
Declaration, legal title to all assets of the Trust shall be vested in the
Trust. The Holders shall not have legal title to any part of the assets of the
Trust, but shall have an undivided beneficial interest in the assets of the
Trust.
SECTION 3.6. POWERS AND DUTIES OF THE REGULAR TRUSTEES.
The Regular Trustees shall have the exclusive power, duty and
authority to cause the Trust to engage in the following activities:
(a) to issue and sell the Capital Securities and the Common
Securities in accordance with this Declaration; PROVIDED
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that the Trust may issue no more than one series of Capital Securities and no
more than one series of Common Securities, and PROVIDED, FURTHER, that there
shall be no interests in the Trust other than the Securities, and the issuance
of Securities shall be limited to a one-time, simultaneous issuance of both
Capital Securities and Common Securities on the Closing Date;
(b) in connection with the issue and sale of the Capital
Securities, at the direction of the Sponsor, to:
(i) execute and file with the Commission the registration
statement on Form S-3 prepared by the Sponsor, including any amendments
thereto, pertaining to the Capital Securities;
(ii) execute and file any documents prepared by the Sponsor,
or take any acts as determined by the Sponsor to be necessary in order
to qualify or register all or part of the Capital Securities in any
State in which the Sponsor has determined to qualify or register such
Capital Securities for sale;
(iii) execute and file an application, prepared by the Sponsor,
to the New York Stock Exchange, Inc. or any other national securities
exchange or with The Nasdaq Stock Market for listing upon notice of
issuance of any Capital Securities;
(iv) execute and file with the Commission a registration
statement on Form 8-A, including any amendments thereto, prepared by
the Sponsor, relating to the registration of the Capital Securities
under Section 12(b) of the Exchange Act; and
(v) designate underwriters to be party to the Underwriting
Agreement and execute and enter into the Underwriting Agreement
providing for the sale of the Capital Securities;
(c) to acquire the Trust Debentures with the proceeds of the
sale of the Capital Securities and the Common Securities; PROVIDED that the
Regular Trustees shall cause legal title to the Trust Debentures to be held of
record in the name of the Property Trustee for the benefit of the Holders of the
Capital Securities and the Holders of the Common Securities;
(d) to give the Sponsor and the Property Trustee prompt
written notice of the occurrence of a Special Event;
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PROVIDED that the Regular Trustees shall consult with the Sponsor and the
Property Trustee before taking or refraining from taking any Ministerial Action
in relation to a Special Event;
(e) to establish a record date with respect to all actions to
be taken hereunder that require a record date be established, including and with
respect to, for the purposes of Section 316(c) of the Trust Indenture Act,
Distributions, voting rights, redemptions and exchanges, and to issue relevant
notices to the Holders of Capital Securities and Holders of Common Securities as
to such actions and applicable record dates;
(f) to take all actions and perform such duties as may be
required of the Regular Trustees pursuant to the terms of the Securities;
(g) to bring or defend, pay, collect, compromise, arbitrate,
resort to legal action, or otherwise adjust claims or demands of or against the
Trust ("Legal Action"), unless pursuant to Section 3.8(e), the Property Trustee
has the exclusive power to bring such Legal Action;
(h) to employ or otherwise engage employees and agents (who
may be designated as officers with titles) and managers, contractors, advisors,
and consultants and pay reasonable compensation for such services;
(i) to cause the Trust to comply with the Trust's obligations
under the Trust Indenture Act;
(j) to give the certificate required by Section 314(a)(4) of
the Trust Indenture Act to the Property Trustee, which certificate may be
executed by any Regular Trustee;
(k) to incur expenses that are necessary or incidental to
carry out any of the purposes of the Trust;
(l) to act as, or appoint another Person to act as, registrar
and transfer agent for the Securities;
(m) to give prompt written notice to the Holders of the
Securities of any notice received from the Trust Debentures Issuer of its
election to defer payments of interest on the Trust Debentures by extending the
interest payment period under the Indenture;
(n) to execute all documents or instruments, perform all
duties and powers, and do all things for and on behalf of
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the Trust in all matters necessary or incidental to the foregoing;
(o) to take all action that may be necessary or appropriate
for the preservation and the continuation of the Trust's valid existence,
rights, franchises and privileges as a statutory business trust under the laws
of the State of Delaware and of each other jurisdiction in which such existence
is necessary to protect the limited liability of the Holders of the Capital
Securities or to enable the Trust to effect the purposes for which the Trust was
created;
(p) to take any action, not inconsistent with this Declaration
or with applicable law, that the Regular Trustees determine in their discretion
to be necessary or desirable in carrying out the activities of the Trust as set
out in this Section 3.6, including, but not limited to:
(i) causing the Trust not to be deemed to be an Investment
Company;
(ii) causing the Trust to be classified for United States
federal income tax purposes as a grantor trust; and
(iii) cooperating with the Trust Debenture Issuer to ensure
that the Trust Debentures will be treated as indebtedness of the Trust
Debenture Issuer for United States federal income tax purposes,
PROVIDED that such action does not adversely affect the interests of Holders;
and
(q) to take all action necessary to cause all applicable tax
returns and tax information reports that are required to be filed with respect
to the Trust to be duly prepared and filed by the Regular Trustees, on behalf of
the Trust.
The Regular Trustees must exercise the powers set forth in
this Section 3.6 in a manner that is consistent with the purposes and functions
of the Trust set out in Section 3.3, and the Regular Trustees shall not take any
action that is inconsistent with the purposes and functions of the Trust set
forth in Section 3.3.
Subject to this Section 3.6, the Regular Trustees shall have
none of the powers or the authority of the Property Trustee set forth in Section
3.8.
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SECTION 3.7. Prohibition of Actions by the Trust and the TRUSTEES.
(a) The Trust shall not, and the Trustees (including the
Property Trustee) shall not, engage in any activity other than as required or
authorized by this Declaration. In particular, the Trust shall not and the
Trustees (including the Property Trustee) shall cause the Trust not to:
(i) invest any proceeds received by the Trust from holding
the Trust Debentures, but shall distribute all such proceeds to Holders
of Securities pursuant to the terms of this Declaration and of the
Securities;
(ii) acquire any assets other than as expressly provided
herein;
(iii) possess Trust property for other than a Trust purpose;
(iv) make any loans or incur any indebtedness other than loans
represented by the Trust Debentures;
(v) possess any power or otherwise act in such a way as to
vary the Trust assets or the terms of the Securities in any way
whatsoever;
(vi) issue any securities or other evidences of beneficial
ownership of, or beneficial interest in, the Trust other than the
Securities; or
(vii) other than as provided in this Declaration, (A) direct
the time, method and place of exercising any trust or power conferred
upon the Trust Debenture Trustee with respect to the Trust Debentures,
(B) waive any past default that is waivable under [Section 6.04] of the
Indenture, (C) exercise any right to rescind or annul any declaration
that the principal of all the Trust Debentures shall be due and
payable, or (D) consent to any amendment or modification of the
Indenture or the Trust Debentures where such consent shall be required
unless the Trust shall have received an opinion of counsel to the
effect that such amendment or modification will not cause more than an
insubstantial risk that for United States federal income tax purposes
the Trust will not be classified as a grantor trust.
<PAGE>
19
SECTION 3.8. POWERS AND DUTIES OF THE PROPERTY TRUSTEE.
(a) The legal title to the Trust Debentures shall be owned by
and held of record in the name of the Property Trustee in trust for the benefit
of the Holders of the Securities. The right, title and interest of the Property
Trustee to the Trust Debentures shall vest automatically in each Person who may
hereafter be appointed as Property Trustee in accordance with Section 5.6. Such
vesting (and cessation as to the resigning Property Trustee) of title shall be
effective whether or not conveyancing documents with regard to the Trust
Debentures have been executed and delivered.
(b) The Property Trustee shall not transfer its right, title
and interest in the Trust Debentures to the Regular Trustees or to the Delaware
Trustee (if the Property Trustee does not also act as Delaware Trustee).
(c) The Property Trustee shall:
(i) establish and maintain a segregated non-interest bearing
trust account (the "Property Trustee Account") in the name of and under
the exclusive control of the Property Trustee on behalf of the Holders
of the Securities and, upon the receipt of payments of funds made in
respect of the Trust Debentures held by the Property Trustee, deposit
such funds into the Property Trustee Account and make payments to the
Holders of the Capital Securities and Holders of the Common Securities
from the Property Trustee Account in accordance with Section 6.1. Funds
in the Property Trustee Account shall be held uninvested until
disbursed in accordance with this Declaration. The Property Trustee
Account shall be an account that is maintained with a banking
institution the rating on whose long-term unsecured indebtedness is at
least equal to the rating assigned to the Capital Securities by a
"nationally recognized statistical rating organization", as that term
is defined for purposes of Rule 436(g)(2) under the Securities Act;
(ii) engage in such ministerial activities as shall be
necessary or appropriate to effect the redemption of the Capital
Securities and the Common Securities to the extent the Trust Debentures
are redeemed or mature; and
(iii) upon notice of distribution issued by the Regular
Trustees in accordance with the terms of the Securities, engage in such
ministerial activities as shall be
<PAGE>
20
necessary or appropriate to effect the distribution of the Trust
Debentures to Holders of Securities upon the occurrence of a Special
Event.
(d) The Property Trustee shall take all actions and perform
such duties as may be specifically required of the Property Trustee pursuant to
the terms of the Securities.
(e) The Property Trustee shall take any Legal Action which
arises out of or in connection with an Event of Default or the Property
Trustee's duties and obligations under this Declaration or the Trust Indenture
Act.
(f) The Property Trustee shall not resign as a Trustee unless
either:
(i) the Trust has been completely liquidated and the proceeds
of the liquidation distributed to the Holders of Securities pursuant to
the terms of the Securities; or
(ii) a successor Property Trustee has been appointed and has
accepted that appointment in accordance with Section 5.6.
(g) The Property Trustee shall have the legal power to
exercise all of the rights, powers and privileges of a holder of Trust
Debentures under the Indenture and, if an Event of Default occurs and is
continuing, the Property Trustee shall, for the benefit of Holders of the
Securities, enforce its rights as holder of the Trust Debentures subject to the
rights of the Holders pursuant to the terms of such Securities.
(h) The Property Trustee may authorize one or more Persons
(each, a "Paying Agent") to pay Distributions, redemption payments or
liquidation payments on behalf of the Trust with respect to all Securities and
any such Paying Agent shall comply with Section 317(b) of the Trust Indenture
Act. Any Paying Agent may be removed by the Property Trustee at any time and a
successor Paying Agent or additional Paying Agents may be appointed at any time
by the Property Trustee.
(i) Subject to this Section 3.8, the Property Trustee shall
have none of the duties, liabilities, powers or the authority of the Regular
Trustees set forth in Section 3.6.
The Property Trustee must exercise the powers set forth in
this Section 3.8 in a manner that is consistent with the purposes and functions
of the Trust set out in Section 3.3,
<PAGE>
21
and the Property Trustee shall not take any action that is inconsistent
with the purposes and functions of the Trust set out in Section 3.3.
SECTION 3.9. Certain Duties and Responsibilities of the PROPERTY TRUSTEE.
(a) The Property Trustee, before the occurrence of any Event
of Default and after the curing of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in
this Declaration and no implied covenants shall be read into this Declaration
against the Property Trustee. In case an Event of Default has occurred (that has
not been cured or waived pursuant to Section 2.6), the Property Trustee shall
exercise such of the rights and powers vested in it by this Declaration, and use
the same degree of care and skill in their exercise, as a prudent person would
exercise or use under the circumstances in the conduct of his or her own
affairs.
(b) No provision of this Declaration shall be construed to
relieve the Property Trustee from liability for its own negligent action, its
own negligent failure to act, or its own willful misconduct, except that:
(i) prior to the occurrence of an Event of Default and after
the curing or waiving of all such Events of Default that may have
occurred:
(A) the duties and obligations of the Property
Trustee shall be determined solely by the express provisions
of this Declaration and the Property Trustee shall not be
liable except for the performance of or failure to perform
such duties and obligations as are specifically set forth in
this Declaration, and no implied covenants or obligations
shall be read into this Declaration against the Property
Trustee; and
(B) in the absence of bad faith or willful misconduct
on the part of the Property Trustee, the Property Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any
certificates or opinions furnished to the Property Trustee and
conforming to the requirements of this Declaration; but in the
case of any such certificates or opinions that by any
provision hereof are specifically required to
<PAGE>
22
be furnished to the Property Trustee, the Property Trustee
shall be under a duty to examine the same to determine whether
or not they conform to the requirements of this Declaration
(but need not confirm or investigate the accuracy of
mathematical calculations or the facts stated therein);
(ii) the Property Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Property
Trustee, unless it shall be proved that the Property Trustee was
negligent in ascertaining the pertinent facts;
(iii) the Property Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in good faith in
accordance with and pursuant to the direction of the Holders of not
less than a Majority in liquidation amount of the Securities relating
to the time, method and place of conducting any proceeding for any
remedy available to the Property Trustee, or exercising any trust or
power conferred upon the Property Trustee under this Declaration;
(iv) no provision of this Declaration shall require the
Property Trustee to expend or risk its own funds or otherwise incur
personal financial liability in the performance of any of its duties or
in the exercise of any of its rights or powers, if it shall have
reasonable grounds for believing that the repayment of such funds or
liability is not reasonably assured to it under the terms of this
Declaration or adequate indemnity against such risk or liability is not
reasonably assured to it;
(v) the Property Trustee's sole duty with respect to the
custody, safe keeping and physical preservation of the Trust Debentures
and the Property Trustee Account shall be to deal with such property in
a manner that is customary in the industry, subject to the protections
and limitations on liability afforded to the Property Trustee under
this Declaration, the Trust Indenture Act and Rule 3a-7;
(vi) the Property Trustee shall have no duty or liability for
or with respect to the value, genuineness, existence or sufficiency of
the Trust Debentures or the payment of any taxes or assessments levied
thereon or in connection therewith;
<PAGE>
23
(vii) the Property Trustee shall not be liable for any interest
on any money received by it except as it may otherwise agree in writing
with the Sponsor. Money held by the Property Trustee need not be
segregated from other funds held by it except in relation to the
Property Trustee Account maintained by the Property Trustee pursuant to
Section 3.8(c)(i) and except to the extent otherwise required by law;
and
(viii) the Property Trustee shall not be responsible for
monitoring the compliance by the Regular Trustees or the Sponsor with
their respective duties under this Declaration, nor shall the Property
Trustee be liable for the default or misconduct of the Regular Trustees
or the Sponsor.
SECTION 3.10. CERTAIN RIGHTS OF THE PROPERTY TRUSTEE.
(a) Subject to the provisions of Section 3.9:
(i) absent bad faith or willful misconduct, the Property
Trustee may conclusively rely and shall be fully protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture, note, other evidence of indebtedness or other
paper or document believed by it to be genuine and to have been signed,
sent or presented by the proper party or parties;
(ii) any direction or act of the Sponsor or the Regular
Trustees contemplated by this Declaration shall be sufficiently
evidenced by a Direction or an Officers' Certificate;
(iii) whenever in the administration of this Declaration, the
Property Trustee shall deem it desirable that a matter be proved or
established before taking, suffering or omitting any action hereunder,
the Property Trustee (unless other evidence is herein specifically
prescribed) may, in the absence of bad faith or willful misconduct on
its part, request and conclusively rely upon an Officers' Certificate
which, upon receipt of such request, shall be promptly delivered by the
Sponsor or the Regular Trustees;
(iv) the Property Trustee shall have no duty to see to any
recording, filing or registration of any instrument (including any
financing or continuation statement or any
<PAGE>
24
filing under tax or securities laws) or any rerecording, refiling or
reregistration thereof;
(v) the Property Trustee may consult with counsel or other
experts of its selection and the advice or opinion of such counsel and
experts with respect to legal matters or advice within the scope of
such experts' area of expertise shall be full and complete
authorization and protection in respect of any action taken, suffered
or omitted by it hereunder in good faith and in accordance with such
advice or opinion. Such counsel may be counsel to the Sponsor or any of
its Affiliates, and may include any of the Sponsor's or its Affiliates'
employees. The Property Trustee shall have the right at any time to
seek instructions concerning the administration of this Declaration
from any court of competent jurisdiction;
(vi) the Property Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Declaration
at the request or direction of any Holder, unless such Holder shall
have provided to the Property Trustee adequate security and indemnity,
which would satisfy a reasonable person in the position of the Property
Trustee, against the costs, expenses (including attorneys' fees and
expenses) and liabilities that might be incurred by it in complying
with such request or direction, including such reasonable advances as
may be requested by the Property Trustee; PROVIDED that nothing
contained in this Section 3.10(a)(vi) shall be taken to relieve the
Property Trustee, upon the occurrence of an Event of Default, of its
obligation to exercise the rights and powers vested in it by this
Declaration;
(vii) the Property Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Property Trustee, in
its discretion, may make such further inquiry or investigation into
such facts or matters as it may see fit;
(viii) the Property Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by
or through agents or attorneys and the Property Trustee shall not be
responsible for any misconduct or negligence on the part of any agent
or attorney appointed with due care by it hereunder;
<PAGE>
25
(ix) any action taken by the Property Trustee or its agents
hereunder shall bind the Trust and the Holders, and the signature of
the Property Trustee or its agents alone shall be sufficient and
effective to perform any such action and no third party shall be
required to inquire as to the authority of the Property Trustee to so
act or as to its compliance with any of the terms and provisions of
this Declaration, both of which shall be conclusively evidenced by the
Property Trustee's or its agent's taking such action;
(x) whenever in the administration of this Declaration the
Property Trustee shall deem it desirable to receive instructions with
respect to enforcing any remedy or right or taking any other action
hereunder, the Property Trustee (i) may request instructions from the
Holders of the Securities which instructions may be given only by the
Holders of the same proportion in liquidation amount of the Securities
as would be entitled to direct the Property Trustee under the terms of
the Securities in respect of such remedy, right or action, (ii) may
refrain from enforcing such remedy or right or taking such other action
until such instructions are received, and (iii) shall be protected in
acting in accordance with such instructions; and
(xi) except as otherwise expressly provided by this
Declaration, the Property Trustee shall not be under any obligation to
take any action that is discretionary under the provisions of this
Declaration.
(b) No provision of this Declaration shall be deemed to impose
any duty or obligation on the Property Trustee to perform any act or acts or
exercise any right, power, duty or obligation conferred or imposed on it, in any
jurisdiction in which it shall be illegal, or in which the Property Trustee
shall be unqualified or incompetent in accordance with applicable law, to
perform any such act or acts, or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Property Trustee
shall be construed to be a duty.
SECTION 3.11. DELAWARE TRUSTEE.
Notwithstanding any other provision of this Declaration other
than Section 5.2, the Delaware Trustee shall not be entitled to exercise any
powers, nor shall the Delaware Trustee have any of the duties and
responsibilities, of the Regular
<PAGE>
26
Trustees or the Property Trustee described in this Declaration. Except as set
forth in Section 5.2, the Delaware Trustee shall be a Trustee for the sole and
limited purpose of fulfilling the requirements of Section 3807 of the Business
Trust Act.
SECTION 3.12. EXECUTION OF DOCUMENTS.
Unless otherwise determined by the Regular Trustees, and
except as otherwise required by the Business Trust Act, a majority of or, if
there are only two, any Regular Trustee or, if there is only one, such Regular
Trustee is authorized to execute on behalf of the Trust any documents that the
Regular Trustees have the power and authority to execute pursuant to Section
3.6; PROVIDED that the registration statement referred to in Section 3.6(b)(i),
including any amendments thereto, shall be signed by all of the Regular
Trustees.
SECTION 3.13. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES.
The recitals contained in this Declaration and the Securities
shall be taken as the statements of the Sponsor, and the Trustees do not assume
any responsibility for their correctness. The Trustees make no representations
as to the value or condition of the property of the Trust or any part thereof.
The Trustees make no representations as to the validity or sufficiency of this
Declaration or the Securities.
SECTION 3.14. DURATION OF TRUST.
The Trust, unless dissolved pursuant to the provisions of
Article VIII hereof, shall have existence for fifty-five (55) years from the
Closing Date.
SECTION 3.15. MERGERS.
(a) The Trust may not consolidate, amalgamate, merge with or
into, or be replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other body, except as
described in Section 3.15(b) and (c).
(b) The Trust may, with the consent of the Regular Trustees
or, if there are more than two, a majority of the Regular Trustees and without
the consent of the Holders, the Delaware Trustee or the Property Trustee,
consolidate, amalgamate, merge with or into, or be replaced by a trust organized
as such under the laws of any State; PROVIDED that:
<PAGE>
27
(i) such successor entity (the "Successor Entity") either:
(A) expressly assumes all of the obligations of the
Trust under the Securities; or
(B) substitutes for the Securities other securities
having substantially the same terms as the Securities (the
"Successor Securities") so long as the Successor Securities
rank the same as the Securities rank with respect to
Distributions and payments upon liquidation, redemption and
otherwise;
(ii) the Trust Debenture Issuer expressly acknowledges a
trustee of the Successor Entity that possesses the same powers and
duties as the Property Trustee as the Holder of the Trust Debentures;
(iii) the Capital Securities or any Successor Securities are
listed, or any Successor Securities will be listed upon notification of
issuance, on the New York Stock Exchange, Inc. or such other national
securities exchange or with The Nasdaq Stock Market or such other
organization on which the Capital Securities are then listed or quoted;
(iv) such merger, consolidation, amalgamation or replacement
does not cause the Capital Securities (including any Successor
Securities) to be downgraded by any nationally recognized statistical
rating organization;
(v) such merger, consolidation, amalgamation or replacement
does not adversely affect the rights, preferences and privileges of the
Holders of the Securities (including any Successor Securities) in any
material respect (other than with respect to any dilution of such
Holders' interests in the Successor Entity as a result of such merger,
consolidation, amalgamation or replacement);
(vi) such Successor Entity has a purpose identical to that of
the Trust;
(vii) prior to such merger, consolidation, amalgamation or
replacement, the Sponsor has received an opinion of a nationally
recognized independent counsel to the Trust experienced in such matters
to the effect that:
<PAGE>
28
(A) such merger, consolidation, amalgamation or
replacement does not adversely affect the rights, preferences
and privileges of the Holders of the Securities (including any
Successor Securities) in any material respect (other than with
respect to any dilution of the Holders' interest in the
Successor Entity); and
(B) following such merger, consolidation,
amalgamation or replacement, neither the Trust nor the
Successor Entity will be required to register as an Investment
Company; and
(viii) the Sponsor guarantees the obligations of such Successor
Entity under the Successor Securities at least to the extent provided
by the Capital Securities Guarantee.
(c) Notwithstanding Section 3.15(b), the Trust shall not,
except with the consent of Holders of 100% in liquidation amount of the
Securities, consolidate, amalgamate, merge with or into, or be replaced by any
other entity or permit any other entity to consolidate, amalgamate, merge with
or into, or replace it if such consolidation, amalgamation, merger or
replacement would cause the Trust or Successor Entity to be classified as other
than a grantor trust for United States federal income tax purposes and any
Holder of Securities not to be treated as owning an undivided beneficial
interest in the Trust Debentures.
ARTICLE IV
SPONSOR
SECTION 4.1. SPONSOR'S PURCHASE OF COMMON SECURITIES.
On the Closing Date the Sponsor will purchase all of the
Common Securities issued by the Trust, in an amount equal to at least 3% of the
capital of the Trust, at the same time as the Capital Securities are sold.
SECTION 4.2. RESPONSIBILITIES OF THE SPONSOR.
In connection with the issue and sale of the Capital
Securities, the Sponsor shall have the exclusive right and responsibility to
engage in the following activities:
<PAGE>
29
(a) to prepare for filing by the Trust with the Commission a
registration statement on Form S-3 in relation to the Capital
Securities, including any amendments thereto;
(b) to determine the States in which to take appropriate
action to qualify or register for sale all or part of the Capital
Securities and to do any and all such acts, other than actions which
must be taken by the Trust, and advise the Trust of actions it must
take, and prepare for execution and filing any documents to be executed
and filed by the Trust, as the Sponsor deems necessary or advisable in
order to comply with the applicable laws of any such States;
(c) to prepare for filing by the Trust an application to the
New York Stock Exchange, Inc. or any other national securities exchange
or with The Nasdaq Stock Market for listing upon notice of issuance of
any Capital Securities;
(d) to prepare for filing by the Trust with the Commission a
registration statement on Form 8-A relating to the registration of the
Capital Securities under Section 12(b) of the Exchange Act, including
any amendments thereto; and
(e) to negotiate the terms of the Underwriting Agreement
providing for the sale of the Capital Securities.
SECTION 4.3. EXPENSES.
(a) The Sponsor shall be responsible for and shall pay for all
debts and obligations (other than with respect to the Securities) and all costs
and expenses of the Trust (including, but not limited to, costs and expenses
relating to the organization of the Trust, the issuance and sale of the
Securities, fees and expenses of filing a registration statement with the
Commission relating to the Capital Securities, the fees and expenses (including
reasonable counsel fees and expenses) of the Trustees, the costs and expenses of
accountants, attorneys, statistical or bookkeeping services, expenses for
printing and engraving and the use of computing or accounting equipment, Paying
Agent(s), registrar(s), transfer agent(s), duplication, travel and telephone and
other telecommunications expenses and costs and expenses incurred in connection
with the disposition of Trust assets).
<PAGE>
30
(b) The Sponsor will pay any and all taxes (other than United
States withholding taxes attributable to the Trust or its assets) and all
liabilities, costs and expenses with respect to such taxes of the Trust.
(c) The Sponsor's obligations under this Section 4.3 shall be
for the benefit of, and shall be enforceable by, the Property Trustee and any
Person to whom any such debts, obligations, costs, expenses and taxes are owed
(a "Creditor") whether or not such Creditor has received notice hereof. The
Property Trustee and any such Creditor may enforce the Sponsor's obligations
under this Section 4.3 directly against the Sponsor and the Sponsor irrevocably
waives any right or remedy to require that the Property Trustee or any such
Creditor take any action against the Trust or any other Person before proceeding
against the Sponsor. The Sponsor agrees to execute such additional agreements as
may be necessary or desirable in order to give full effect to the provisions of
this Section 4.3.
ARTICLE V
TRUSTEES
SECTION 5.1. NUMBER OF TRUSTEES.
The number of Trustees initially shall be five (5), and:
(a) at any time before the issuance of any Securities, the
Sponsor may, by written instrument, increase or decrease the number of
Trustees; and
(b) after the issuance of any Securities, the number of
Trustees may be increased or decreased by vote of the Holders of a
majority in liquidation amount of the Common Securities voting as a
class at a meeting of the Holders of the Common Securities,
PROVIDED that, if the Property Trustee does not also act as Delaware Trustee,
the number of Trustees shall be at least three (3).
<PAGE>
31
SECTION 5.2. DELAWARE TRUSTEE.
If required by the Business Trust Act, one Trustee (the
"Delaware Trustee") shall be:
(a) a natural person who is a resident of the State of
Delaware; or
(b) if not a natural person, an entity which has its principal
place of business in the State of Delaware, and otherwise meets the
requirements of applicable law,
PROVIDED that, if the Property Trustee has its principal place of business in
the State of Delaware and otherwise meets the requirements of applicable law,
then the Property Trustee shall also be the Delaware Trustee and Section 3.11
shall have no application. The Delaware Trustee may be an Affiliate of the
Property Trustee.
SECTION 5.3. PROPERTY TRUSTEE; ELIGIBILITY.
(a) There shall at all times be one Trustee which shall act as
Property Trustee which shall:
(i) not be an Affiliate of the Sponsor;
(ii) be a corporation organized and doing business under the
laws of the United States of America or any State or Territory thereof
or of the District of Columbia, or a corporation or Person permitted by
the Commission to act as an institutional trustee under the Trust
Indenture Act, authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at least 50 million
U.S. dollars ($50,000,000), and subject to supervision or examination
by federal, State, Territorial or District of Columbia authority. If
such corporation publishes reports of condition at least annually,
pursuant to law or to the requirements of the supervising or examining
authority referred to above, then for the purposes of this Section
5.3(a)(ii), the combined capital and surplus of such corporation shall
be deemed to be its combined capital and surplus as set forth in its
most recent report of condition so published; and
(iii) if the Trust is excluded from the definition of an
Investment Company solely by means of Rule 3a-7 and to the extent Rule
3a-7 requires a trustee having certain qualifications to hold title to
the "eligible assets" of
<PAGE>
32
the Trust, the Property Trustee shall possess those qualifications.
(b) If at any time the Property Trustee shall cease to be
eligible to so act under Section 5.3(a), the Property Trustee shall immediately
resign in the manner and with the effect set forth in Section 5.6(c).
(c) If the Property Trustee has or shall acquire any
"conflicting interest" within the meaning of Section310(b) of the Trust
Indenture Act, the Property Trustee and the Holder of the Common Securities (as
if it were the obligor referred to in Section 310(b) of the Trust Indenture Act)
shall in all respects comply with the provisions of Section310(b) of the Trust
Indenture Act.
(d) The Capital Securities Guarantee shall be deemed to be
specifically described in this Declaration for purposes of clause (i) of the
first provision contained in Section 310(b) of the Trust Indenture Act.
SECTION 5.4. QUALIFICATIONS OF REGULAR TRUSTEES AND DELAWARE TRUSTEE GENERALLY.
Each Regular Trustee and the Delaware Trustee (unless the
Property Trustee also acts as Delaware Trustee) shall be either a natural person
who is at least 21 years of age or a legal entity that shall act through one or
more Authorized Officers.
SECTION 5.5. INITIAL TRUSTEES.
The initial Regular Trustees shall be:
[ ]
[ ]
[ ]
The initial Delaware Trustee shall be:
[ ]
The initial Property Trustee shall be:
[ ]
<PAGE>
33
SECTION 5.6. APPOINTMENT, REMOVAL AND RESIGNATION OF TRUSTEES.
(a) Subject to Section 5.6(b), Trustees may be appointed or
removed without cause at any time:
(i) until the issuance of any Securities, by written
instrument executed by the Sponsor; and
(ii) after the issuance of any Securities, by vote of the
Holders of a Majority in liquidation amount of the Common Securities
voting as a class at a meeting of the Holders of the Common Securities
or by unanimous written consent.
(b)(i) The Trustee that acts as Property Trustee shall not be
removed in accordance with Section 5.6(a) until a successor Property Trustee has
been appointed and has accepted such appointment by written instrument executed
by such successor Property Trustee and delivered to the Regular Trustees and the
Sponsor; and
(ii) the Trustee that acts as Delaware Trustee shall not be
removed in accordance with this Section 5.6(a) until a successor Trustee
possessing the qualifications to act as Delaware Trustee under Sections 5.2 and
5.4 (a "Successor Delaware Trustee") has been appointed and has accepted such
appointment by written instrument executed by such Successor Delaware Trustee
and delivered to the Regular Trustees and the Sponsor.
(c) A Trustee appointed to office shall hold office until his
successor shall have been appointed or until his death, removal or resignation.
Any Trustee may resign from office (without need for prior or subsequent
accounting) by an instrument in writing signed by the Trustee and delivered to
the Sponsor and the Trust, which resignation shall take effect upon such
delivery or upon such later date as is specified therein; PROVIDED that:
(i) no such resignation of the Trustee that acts as the
Property Trustee shall be effective:
(A) until a Successor Property Trustee has been
appointed and has accepted such appointment by instrument
executed by such Successor Property Trustee and delivered to
the Trust, the Sponsor and the resigning Property Trustee; or
<PAGE>
34
(B) if the Trust is deemed not to be an Investment
Company solely by reason of Rule 3a-7, until the assets of the
Trust have been completely liquidated and the proceeds thereof
distributed to the Holders of the Securities; and
(ii) no such resignation of the Trustee that acts as the
Delaware Trustee shall be effective until a Successor Delaware Trustee
has been appointed and has accepted such appointment by instrument
executed by such Successor Delaware Trustee and delivered to the Trust,
the Sponsor and the resigning Delaware Trustee.
(d) The Holders of the Common Securities shall use their best
efforts to appoint a Successor Property Trustee or Successor Delaware Trustee
promptly, as the case may be, if the Property Trustee or the Delaware Trustee
delivers an instrument of resignation in accordance with this Section 5.6.
(e) If no Successor Property Trustee or Successor Delaware
Trustee shall have been appointed and accepted appointment as provided in this
Section 5.6 within 30 days after delivery of an instrument of resignation or
removal, the Property Trustee or Delaware Trustee resigning or being removed, as
applicable, may (at the expense of the Sponsor) petition any court of competent
jurisdiction for appointment of a Successor Property Trustee or Successor
Delaware Trustee. Such court may thereupon, after prescribing such notice, if
any, as it may deem proper and prescribe, appoint a Successor Property Trustee
or Successor Delaware Trustee, as the case may be.
SECTION 5.7. VACANCIES AMONG TRUSTEES.
If a Trustee ceases to hold office for any reason and the
number of Trustees is not reduced pursuant to Section 5.1, or if the number of
Trustees is increased pursuant to Section 5.1, a vacancy shall occur. A
resolution certifying the existence of such vacancy by the Regular Trustees or,
if there are more than two, a majority of the Regular Trustees shall be
conclusive evidence of the existence of such vacancy. The vacancy shall be
filled with a Trustee appointed in accordance with Section 5.6.
SECTION 5.8. EFFECT OF VACANCIES.
The death, resignation, retirement, removal, bankruptcy,
dissolution, liquidation, incompetence or incapacity to perform the duties of a
Trustee shall not operate to annul the
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Trust. Whenever a vacancy in the number of Regular Trustees shall occur, until
such vacancy is filled by the appointment of a Regular Trustee in accordance
with Section 5.6, the Regular Trustees in office, regardless of their number,
shall have all the powers granted to the Regular Trustees and shall discharge
all the duties imposed upon the Regular Trustees by this Declaration.
SECTION 5.9. MEETINGS.
If there is more than one Regular Trustee, meetings of the
Regular Trustees shall be held from time to time upon the call of any Regular
Trustee. Regular meetings of the Regular Trustees may be held at a time and
place fixed by resolution of the Regular Trustees. Unless notice is waived,
notice of any in-person meetings of the Regular Trustees shall be hand delivered
or otherwise delivered in writing (including by facsimile, with a hard copy by
overnight courier) not less than 48 hours before such meeting. Unless notice is
waived, notice of any telephonic meetings of the Regular Trustees or any
committee thereof shall be hand delivered or otherwise delivered in writing
(including by facsimile, with a hard copy by overnight courier) not less than 24
hours before such meeting. Notices shall contain a brief statement of the time,
place and anticipated purposes of the meeting. The presence (whether in person
or by telephone) of a Regular Trustee at a meeting shall constitute a waiver of
notice of such meeting except where a Regular Trustee attends a meeting for the
express purpose of objecting to the transaction of any activity on the ground
that the meeting has not been lawfully called or convened. Unless provided
otherwise in this Declaration, any action of the Regular Trustees may be taken
at a meeting by vote of a majority of the Regular Trustees present (whether in
person or by telephone) and eligible to vote with respect to such matter,
provided that a Quorum is present, or without a meeting by the unanimous written
consent of the Regular Trustees. In the event there is only one Regular Trustee,
any and all action of such Regular Trustee shall be evidenced by a written
consent of such Regular Trustee.
SECTION 5.10. DELEGATION OF POWER.
(a) Any Regular Trustee may, by power of attorney consistent
with applicable law, delegate to any other natural person over the age of 21 his
or her power for the purpose of executing any documents contemplated in Section
3.6, including any registration statement or amendment thereto filed with the
Commission, or making any other governmental filing; and
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36
(b) The Regular Trustees shall have power to delegate from
time to time to such of their number or to officers of the Trust the doing of
such things and the execution of such instruments either in the name of the
Trust or the names of the Regular Trustees or otherwise as the Regular Trustees
may deem expedient, to the extent such delegation is not prohibited by
applicable law or contrary to the provisions of the Trust, as set forth herein.
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1. DISTRIBUTIONS.
Holders shall receive Distributions (as defined herein) in
accordance with the applicable terms of the relevant Holder's Securities.
Distributions shall be made on the Capital Securities and the Common Securities
in accordance with the preferences set forth in their respective terms. If and
to the extent that the Trust Debenture Issuer makes a payment of interest
(including Additional Interest (as defined in the Indenture)), premium and/or
principal on the Trust Debentures held by the Property Trustee (the amount of
any such payment being a "Payment Amount"), the Property Trustee shall and is
directed, to the extent funds are available for that purpose, to make a
distribution (a "Distribution") of the Payment Amount to the Holders.
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1. GENERAL PROVISIONS REGARDING SECURITIES.
(a) The Regular Trustees shall on behalf of the Trust issue
one class of capital securities representing undivided beneficial interests in
the assets of the Trust having such terms as are set forth in Annex I (the
"Capital Securities") and one class of common securities representing undivided
beneficial interests in the assets of the Trust having such terms as are set
forth in Annex I (the "Common Securities.") The Trust shall not issue any
securities or other
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interests in respect of the assets of the Trust other than the Capital
Securities and the Common Securities.
(b) The Certificates shall be signed on behalf of the Trust by
two Regular Trustees. Each such signature shall be the manual or facsimile
signature of any present or any future Regular Trustee. In case any Regular
Trustee of the Trust who shall have signed any of the Certificates shall cease
to be such Regular Trustee before the Certificates so signed shall be delivered
by the Trust, such Certificates nevertheless may be delivered as though the
person who signed such Certificates had not ceased to be such Regular Trustee;
and any Certificate may be signed on behalf of the Trust by such persons who, at
the actual date of execution of such Certificate, shall be the Regular Trustees
of the Trust, although at the date of the execution and delivery of the
Declaration any such person was not such a Regular Trustee. Certificates shall
be printed, lithographed or engraved or may be produced in any other manner as
is reasonably acceptable to the Regular Trustees, as evidenced by their
execution thereof, and may have such letters, numbers or other marks of
identification or designation and such legends or endorsements as the Regular
Trustees may deem appropriate, or as may be required to comply with any law or
with any rule or regulation made pursuant thereto or with any rule or regulation
of any stock exchange on which Securities may be listed, or to conform to usage.
Upon a written order of the Trust signed by one Regular Trustee, the Property
Trustee shall countersign the Capital Security Certificate for original issue.
(c) The consideration received by the Trust for the issuance
of the Securities shall constitute a contribution to the capital of the Trust
and shall not constitute a loan to the Trust.
(d) Upon issuance of the Securities as provided in this
Declaration, the Securities so issued shall be deemed to be validly issued,
fully paid and non-assessable.
(e) Every Person, by virtue of having become a Holder or a
Capital Security Beneficial Owner in accordance with the terms of this
Declaration, shall be deemed to have expressly assented and agreed to the terms
of, and shall be bound by, this Declaration.
(f) Every Person who becomes a Holder or a Capital Security
Beneficial Owner shall be deemed to have agreed to treat the Trust Debentures as
indebtedness for United States
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federal income tax purposes and the Capital Securities as evidence of an
indirect beneficial ownership in the Trust Debentures.
ARTICLE VIII
DISSOLUTION OF TRUST
SECTION 8.1. DISSOLUTION OF TRUST.
(a) The Trust shall dissolve and its affairs shall be wound
up:
(i) upon the bankruptcy of the Holder of the Common Securities
or the Sponsor;
(ii) upon the filing of a certificate of dissolution or its
equivalent with respect to the Holder of the Common Securities or the
Sponsor; the filing of a certificate of cancellation with respect to
the Trust or the revocation of the Holder of the Common Securities or
the Sponsor's charter and the expiration of 90 days after the date of
revocation without a reinstatement thereof;
(iii) upon the entry of a decree of judicial dissolution of the
Holder of the Common Securities, the Sponsor or the Trust;
(iv) when all of the Securities shall have been called for
redemption and the amounts necessary for redemption thereof shall have
been paid to the Holders in accordance with the terms of the
Securities;
(v) upon the occurrence and continuation of a Special Event
pursuant to which the Trust shall have been dissolved in accordance
with the terms of the Securities and all of the Trust Debentures in
accordance with the terms thereof shall have been distributed to the
Holders of Securities in exchange for all of the Securities; or
(vi) before the issuance of any Securities, with the consent
of all of the Regular Trustees and the Sponsor.
(b) As soon as is practicable after the occurrence of an event
referred to in Section 8.1(a), the Trustees shall
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file a certificate of cancellation with the Secretary of State of the State of
Delaware.
(c) The provisions of Section 3.9 and Article X shall survive
the termination of the Trust.
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1. TRANSFER OF SECURITIES.
(a) Securities may be transferred, in whole or in part, only
in accordance with the terms and conditions set forth in this Declaration and in
the Securities. Any transfer or purported transfer of any Security not made in
accordance with this Declaration and these Securities shall be null and void.
(b) Subject to this Article IX, Capital Securities shall be
freely transferable.
(c) Subject to this Article IX, (x) the Sponsor may transfer
Common Securities only to a Related Party and (y) a Related Party may transfer
Common Securities only to the Sponsor or another Related Party; PROVIDED that
any such transfer is subject to the condition precedent that the transferor
obtain the written opinion of nationally recognized independent counsel
experienced in such matters that such transfer would not cause more than an
insubstantial risk that:
(i) the Trust would no longer be classified for United States
federal income tax purposes as a grantor trust; or
(ii) the Trust would become an Investment Company or the
transferee would become an Investment Company.
SECTION 9.2. TRANSFER OF CERTIFICATES.
The Regular Trustees shall provide for the registration of
Certificates and of transfers of Certificates, which will be effected without
charge but only upon payment (with such indemnity as the Regular Trustees may
require) in respect of any tax or other government charges that may be imposed
in relation to it. Upon surrender for registration of transfer of
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any Certificate, the Regular Trustees shall cause one or more new Certificates
to be issued in the name of the designated transferee or transferees. Every
Certificate surrendered for registration of transfer shall be accompanied by a
written instrument of transfer in form satisfactory to the Regular Trustees duly
executed by the Holder or such Holder's attorney duly authorized in writing.
Each Certificate surrendered for registration of transfer shall be canceled by
the Regular Trustees. A transferee of a Certificate shall be entitled to the
rights and subject to the obligations of a Holder hereunder upon the receipt by
such transferee of a Certificate. By acceptance of a Certificate, each
transferee shall be deemed to have agreed to be bound by this Declaration and
the terms of the Securities represented by such Certificate.
SECTION 9.3. DEEMED SECURITY HOLDERS.
The Trustees may treat the Person in whose name any
Certificate shall be registered on the books and records of the Trust as the
sole Holder of such Certificate and of the Securities represented by such
Certificate for purposes of receiving Distributions and for all other purposes
whatsoever and, accordingly, shall not be bound to recognize any equitable or
other claim to or interest in such Certificate or in the Securities represented
by such Certificate on the part of any Person, whether or not the Trust shall
have actual or other notice thereof.
SECTION 9.4. BOOK ENTRY INTERESTS.
Unless otherwise specified in the terms of the Capital
Securities, the Capital Securities Certificates, on original issuance, will be
issued in the form of one or more, fully registered, global Capital Security
Certificates (each a "Global Certificate"), to be delivered to DTC, the initial
Clearing Agency, by, or on behalf of, the Trust. Such Global Certificates shall
initially be registered on the books and records of the Trust in the name of
Cede & Co., the nominee of DTC, and no Capital Security Beneficial Owner will
receive a definitive Capital Security Certificate representing such Capital
Security Beneficial Owner's interests in such Global Certificates, except as
provided in Section 9.7. Unless and until definitive, fully registered Capital
Security Certificates (the "Definitive Capital Security Certificates") have been
issued to the Capital Security Beneficial Owners pursuant to Section 9.7:
(a) the provisions of this Section 9.4 shall be in full force
and effect;
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(b) the Trust and the Trustees shall be entitled to deal with
the Clearing Agency for all purposes of this Declaration (including the
payment of Distributions on the Global Certificates and receiving
approvals, votes or consents hereunder) as the Holder of the Capital
Securities and the sole holder of the Global Certificates and shall
have no obligation to the Capital Security Beneficial Owners;
(c) to the extent that the provisions of this Section 9.4
conflict with any other provisions of this Declaration, the provisions
of this Section 9.4 shall control; and
(d) the rights of the Capital Security Beneficial Owners shall
be exercised only through the Clearing Agency and shall be limited to
those established by law and agreements between such Capital Security
Beneficial Owners and the Clearing Agency and/or the Clearing Agency
Participants. The Clearing Agency will make book entry transfers among
the Clearing Agency Participants and receive and transmit payments of
Distributions on the Global Certificates to such Clearing Agency
Participants.
SECTION 9.5. NOTICES TO CLEARING AGENCY.
Whenever a notice or other communication to the Capital
Security Holders is required under this Declaration, unless and until Definitive
Capital Security Certificates shall have been issued to the Capital Security
Beneficial Owners pursuant to Section 9.7, the Regular Trustees shall give all
such notices and communications specified herein to be given to the Capital
Security Holders to the Clearing Agency, and shall have no notice obligations to
the Capital Security Beneficial Owners.
SECTION 9.6. APPOINTMENT OF SUCCESSOR CLEARING AGENCY.
If any Clearing Agency elects to discontinue its services as
securities depositary with respect to the Capital Securities, the Regular
Trustees may, in their sole discretion, appoint a successor Clearing Agency with
respect to the Capital Securities.
SECTION 9.7. DEFINITIVE CAPITAL SECURITY CERTIFICATES.
If:
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(a) a Clearing Agency elects to discontinue its services as
securities depositary with respect to the Capital Securities and a
successor Clearing Agency is not appointed within 90 days after such
election pursuant to Section 9.6; or
(b) the Regular Trustees elect after consultation with the
Sponsor to terminate the book entry system through the Clearing Agency
with respect to the Capital Securities,
then:
(c) Definitive Capital Security Certificates shall be prepared
by the Regular Trustees on behalf of the Trust with respect to the
Capital Securities; and
(d) upon surrender of the Global Certificates by the Clearing
Agency, accompanied by registration instructions, the Regular Trustees
shall cause Definitive Capital Security Certificates to be delivered to
Capital Security Beneficial Owners in accordance with the instructions
of the Clearing Agency. Neither the Trustees nor the Trust shall be
liable for any failure or delay in delivery of such instructions and
each of them may conclusively rely on and shall be protected in relying
on, said instructions of the Clearing Agency. The Definitive Capital
Security Certificates shall be printed, lithographed or engraved or may
be produced in any other manner as is reasonably acceptable to the
Regular Trustees, as evidenced by their execution thereof, and may have
such letters, numbers or other marks of identification or designation
and such legends or endorsements as the Regular Trustees may deem
appropriate, or as may be required to comply with any law or with any
rule or regulation made pursuant thereto or with any rule or regulation
of any stock exchange on which the Capital Securities may be listed, or
to conform to usage.
SECTION 9.8. MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES.
If:
(a) any mutilated Certificate should be surrendered to the
Regular Trustees, or if the Regular Trustees shall receive evidence to
their satisfaction of the destruction, loss or theft of any
Certificate; and
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(b) there shall be delivered to the Regular Trustees such
security or indemnity as may be required by them to keep each of them
harmless,
then, in the absence of notice that such Certificate shall have been acquired by
a bona fide purchaser, any Regular Trustee on behalf of the Trust shall execute
and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost
or stolen Certificate, a new Certificate of like denomination. In connection
with the issuance of any new Certificate under this Section 9.8, the Regular
Trustees may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection therewith. Any duplicate
Certificate issued pursuant to this Section shall constitute conclusive evidence
of an ownership interest in the relevant Securities, as if originally issued,
whether or not the lost, stolen or destroyed Certificate shall be found at any
time.
ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1. LIABILITY.
(a) Except as expressly set forth in this Declaration, the
Securities Guarantees and the terms of the Securities, the Sponsor shall not be:
(i) personally liable for the return of any portion of the
capital contributions (or any return thereon) of the Holders, which
shall be made solely from assets of the Trust; or
(ii) required to pay to the Trust or to any Holder any deficit
upon dissolution of the Trust or otherwise.
(b) The Holder of the Common Securities shall be liable for
all of the debts and obligations of the Trust (other than with respect to the
Securities) to the extent not satisfied out of the Trust's assets.
(c) Pursuant to Section 3803(a) of the Business Trust Act, the
Holders of the Capital Securities shall be entitled to the same limitation of
personal liability extended to stockholders
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of private corporations for profit organized under the General Corporation Law
of the State of Delaware.
SECTION 10.2. EXCULPATION.
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Trust or any Covered Person for any
loss, damage or claim incurred by reason of any act or omission performed or
omitted by such Indemnified Person in good faith on behalf of the Trust and in a
manner such Indemnified Person reasonably believed to be within the scope of the
authority conferred on such Indemnified Person by this Declaration or by law,
except that an Indemnified Person shall be liable for any such loss, damage or
claim incurred by reason of such Indemnified Person's gross negligence (or, in
the case of the Property Trustee, negligence) or willful misconduct with respect
to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying
in good faith upon the records of the Trust and upon such information, opinions,
reports or statements presented to the Trust by any Person as to matters the
Indemnified Person reasonably believes are within such other Person's
professional or expert competence and who has been selected with reasonable care
by or on behalf of the Trust, including information, opinions, reports or
statements as to the value and amount of the assets, liabilities, profits,
losses, or any other facts pertinent to the existence and amount of assets from
which Distributions to Holders of Securities might properly be paid.
SECTION 10.3. FIDUCIARY DUTY.
(a) To the extent that, at law or in equity, an Indemnified
Person has duties (including fiduciary duties) and liabilities relating thereto
to the Trust or to any other Covered Person, an Indemnified Person acting under
this Declaration shall not be liable to the Trust or to any other Covered Person
for its good faith reliance on the provisions of this Declaration. The
provisions of this Declaration, to the extent that they restrict the duties and
liabilities of an Indemnified Person otherwise existing at law or in equity
(other than the duties imposed on the Property Trustee under the Trust Indenture
Act), are agreed by the parties hereto to replace such other duties and
liabilities of such Indemnified Person.
(b) Unless otherwise expressly provided herein:
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(i) whenever a conflict of interest exists or arises between
any Covered Persons; or
(ii) whenever this Declaration or any other agreement
contemplated herein or therein provides that an Indemnified Person
shall act in a manner that is, or provide terms that are, fair and
reasonable to the Trust or any Holder,
the Indemnified Person shall resolve such conflict of interest, take such action
or provide such terms, considering in each case the relative interest of each
party (including its own interest) to such conflict, agreement, transaction or
situation and the benefits and burdens relating to such interests, any customary
or accepted industry practices, and any applicable generally accepted accounting
practices or principles. In the absence of bad faith by the Indemnified Person,
the resolution, action or term so made, taken or provided by the Indemnified
Person shall not constitute a breach of this Declaration or any other agreement
contemplated herein or of any duty or obligation of the Indemnified Person at
law or in equity or otherwise.
(c) Whenever in this Declaration an Indemnified Person is
permitted or required to make a decision:
(i) in its "discretion" or under a grant of similar authority,
the Indemnified Person shall be entitled to consider such interests and
factors as it desires, including its own interests, and shall have no
duty or obligation to give any consideration to any interest of or
factors affecting the Trust or any other Person; or
(ii) in its "good faith" or under another express standard,
the Indemnified Person shall act under such express standard and shall
not be subject to any other or different standard imposed by this
Declaration or by applicable law.
SECTION 10.4. INDEMNIFICATION AND REIMBURSEMENT.
(a) The Sponsor shall indemnify and hold harmless each
Indemnified Person from and against any loss, damage, liability, tax, penalty,
expense or claim of any kind or nature whatsoever incurred by such Indemnified
Person by reason of the creation, operation or termination of the Trust or any
act or omission performed or omitted by such Indemnified Person in good faith on
behalf of the Trust and in a manner such Indemnified
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Person reasonably believed to be within the scope of authority conferred on such
Indemnified Person by this Declaration, except that no Indemnified Person shall
be entitled to be indemnified in respect of any loss, damage or claim incurred
by such Indemnified Person by reason of gross negligence (or, in the case of the
Property Trustee, negligence) or willful misconduct with respect to such acts or
omissions.
(b) Expenses (including legal fees and expenses) incurred by
an Indemnified Person in defending any claim, demand, action, suit or proceeding
(whether such claim, demand, action, suit or proceeding arises between the
parties hereto or results from suits involving third parties) shall, from time
to time, be advanced by the Sponsor prior to the final disposition of such
claim, demand, action, suit or proceeding upon receipt by the Sponsor of an
undertaking by or on behalf of the Indemnified Person to repay such amount if it
shall be determined that the Indemnified Person is not entitled to be
indemnified as authorized in Section 10.4(a). The indemnification set forth in
this Section 10.4 shall survive the termination of this Declaration.
(c) The Sponsor shall reimburse the Trustees upon request for
all reasonable expenses, disbursements and advances incurred or made by the
Trustees in accordance with any provision of this Declaration (including the
reasonable compensation and the expenses and disbursements of its agents and
counsel).
The Property Trustee shall have a lien prior to the Securities
as to all property and funds held by its hereunder for any amount owing it or
any predecessor Property Trustee pursuant to this Section 10.4, except with
respect to funds held in trust for the benefit of the Holders of particular
Securities.
The provisions of this Section shall survive the termination
of this Declaration.
SECTION 10.5. OUTSIDE BUSINESSES.
Any Covered Person, the Sponsor, the Delaware Trustee and the
Property Trustee may engage in or possess an interest in other business ventures
of any nature or description, independently or with others, similar or
dissimilar to the business of the Trust, and the Trust and the Holders shall
have no rights by virtue of this Declaration in and to such independent ventures
or the income or profits derived therefrom, and the pursuit of any such venture,
even if competitive with the business
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of the Trust, shall not be deemed wrongful or improper. No Covered Person, the
Sponsor, the Delaware Trustee, or the Property Trustee shall be obligated to
present any particular investment or other opportunity to the Trust even if such
opportunity is of a character that, if presented to the Trust, could be taken by
the Trust, and any Covered Person, the Sponsor, the Delaware Trustee and the
Property Trustee shall have the right to take for its own account (individually
or as a partner or fiduciary) or to recommend to others any such particular
investment or other opportunity. Any Covered Person, the Delaware Trustee and
the Property Trustee may engage or be interested in any financial or other
transaction with the Sponsor or any Affiliate of the Sponsor, or may act as
depositary for, trustee or agent for, or act on any committee or body of holders
of, securities or other obligations of the Sponsor or its Affiliates.
ARTICLE XI
ACCOUNTING
SECTION 11.1. FISCAL YEAR.
The fiscal year ("Fiscal Year") of the Trust shall be the
calendar year, or such other year as is required by the Code.
SECTION 11.2. CERTAIN ACCOUNTING MATTERS.
(a) At all times during the existence of the Trust, the
Regular Trustees shall keep, or cause to be kept, full books of account, records
and supporting documents which shall reflect, in reasonable detail, each
transaction of the Trust. The books of account shall be maintained on the
accrual method of accounting, in accordance with U.S. generally accepted
accounting principles, consistently applied. The Trust shall use the accrual
method of accounting for United States federal income tax purposes.
(b) The Regular Trustees shall cause to be duly prepared and
delivered to each Holder, any annual United States federal income tax
information statement, required by the Code, containing such information with
regard to the Securities held by such Holder as is required by the Code and the
Treasury Regulations. Notwithstanding any right under the Code to deliver any
such statement at a later date, the Regular Trustees
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shall endeavor to deliver all such statements within 30 days after the end of
each Fiscal Year of the Trust.
(c) The Regular Trustees shall cause to be duly prepared and
filed with the appropriate taxing authority an annual United States federal
income tax return, on a Form 1041 or such other form required by United States
federal income tax law, and any other annual income tax returns required to be
filed by the Regular Trustees on behalf of the Trust with any state or local
taxing authority.
SECTION 11.3. BANKING.
The Trust shall maintain one or more bank accounts in the name
and for the sole benefit of the Trust; PROVIDED that all payments of funds in
respect of the Trust Debentures held by the Property Trustee shall be made
directly to the Property Trustee Account and no other funds of the Trust shall
be deposited in the Property Trustee Account. The sole signatories for such
accounts shall be designated by the Regular Trustees; PROVIDED that the Property
Trustee shall designate the signatories for the Property Trustee Account.
SECTION 11.4. WITHHOLDING.
The Trust and the Regular Trustees shall comply with all
withholding requirements under United States federal, state and local law. The
Trust shall request, and the Holders shall provide to the Trust, such forms or
certificates as are necessary to establish an exemption from withholding with
respect to each Holder, and any representations and forms as shall reasonably be
requested by the Trust to assist it in determining the extent of, and in
fulfilling, its withholding obligations. The Regular Trustee shall file required
forms with applicable jurisdictions and, unless an exemption from withholding is
properly established by a Holder, shall remit amounts withheld with respect to
such Holder to applicable jurisdictions. To the extent that the Trust is
required to withhold and pay over any amounts to any authority with respect to
distributions or allocations to any Holder, the amount withheld shall be deemed
to be a distribution in the amount of the withholding to such Holder. In the
event of any claim over withholding, Holders shall be limited to an action
against the applicable jurisdiction. If the amount required to be withheld was
not withheld from actual Distributions made, the Trust may reduce subsequent
Distributions by the amount of such withholding.
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ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1. AMENDMENTS.
(a) Except as otherwise provided in this Declaration or by any
applicable terms of the Securities, this Declaration may be amended only by a
written instrument approved and executed by:
(i) the Regular Trustees (or, if there are more than two
Regular Trustees, a majority of the Regular Trustees);
(ii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Property Trustee, the Property
Trustee; and
(iii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Delaware Trustee, the Delaware
Trustee.
(b) No amendment shall be made, and any purported amendment
shall be void and ineffective:
(i) unless, in the case of any proposed amendment, the
Property Trustee shall have first received:
(A) an Officers' Certificate from each of the Trust
and the Sponsor and an opinion of counsel (who may be counsel
to the Sponsor or the Trust) that such amendment is permitted
by, and conforms to, the terms of this Declaration (including
the terms of the Securities); and
(B) an opinion of counsel (who may be counsel to the
Sponsor or the Trust) that such amendment is permitted by, and
conforms to, the terms of this Declaration (including the
terms of the Securities);
(ii) unless, in the case of any proposed amendment which
affects the rights, powers, duties, obligations or immunities of the
Property Trustee, the Property Trustee shall have first received:
(A) an Officers' Certificate from each of the Trust
and the Sponsor that such amendment is permitted
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by, and conforms to, the terms of this Declaration (including
the terms of the Securities); and
(B) an opinion of counsel (who may be counsel to the
Sponsor or the Trust) that such amendment is permitted by, and
conforms to, the terms of this Declaration (including the
terms of the Securities); and
(iii) to the extent the result of such amendment would be to:
(A) cause the Trust to fail to continue to be
classified for purposes of United States federal income
taxation as a grantor trust;
(B) reduce or otherwise adversely affect the powers
of the Property Trustee in contravention of the Trust
Indenture Act; or
(C) cause the Trust to be deemed to be an Investment
Company required to be registered under the Investment Company
Act.
(c) If the Trust has any Securities outstanding, any amendment
that would adversely affect the rights, privileges or preferences of any Holder
of such Securities may be effected only with such additional requirements as may
be set forth in the terms of such Securities.
(d) Section 9.1(c) and this Section 12.1 shall not be amended
without the consent of all of the Holders of the Securities.
(e) Article IV shall not be amended without the consent of the
Holders of a Majority in liquidation amount of the Common Securities.
(f) The rights of the holders of the Common Securities under
Article V to increase or decrease the number of, and appoint and remove,
Trustees shall not be amended without the consent of the Holders of a Majority
in liquidation amount of the Common Securities.
(g) Notwithstanding Section 12.1(c), this Declaration may be
amended without the consent of the Holders of the Securities to:
(i) cure any ambiguity;
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(ii) correct or supplement any provision in this Declaration
that may be defective or inconsistent with any other provision of this
Declaration;
(iii) add to the covenants, restrictions or obligations of the
Sponsor;
(iv) in the event the Trust is deemed not to be an Investment
Company solely by reason of Rule 3a-7, conform to any change in Rule
3a-7 or written change in interpretation or application of Rule 3a-7 by
any legislative body, court, government agency or regulatory authority
which amendment does not have a material adverse effect on the rights,
preferences or privileges of the Holders; and
(v) cause the Trust to continue to be classified for purposes
of United States federal income taxation as a grantor trust; PROVIDED
that such amendment does not have a material adverse effect on the
rights, preferences or privileges of the Holders.
SECTION 12.2. MEETINGS OF THE HOLDERS; ACTION BY WRITTEN CONSENT.
(a) Meetings of the Holders of any class of Securities may be
called at any time by the Regular Trustees (or as provided in the terms of the
Securities) to consider and act on any matter on which Holders of such class of
Securities are entitled to act under the terms of this Declaration, the terms of
the Securities or the rules of any stock exchange on which the Capital
Securities are listed or admitted for trading. The Regular Trustees shall call a
meeting of the Holders of such class if directed to do so by the Holders of at
least 10% in liquidation amount of such class of Securities. Such direction
shall be given by delivering to the Regular Trustees one or more calls in a
writing stating that the signing Holders wish to call a meeting and indicating
the general or specific purpose for which the meeting is to be called. Any
Holders calling a meeting shall specify in writing the Security Certificates
held by the Holders exercising the right to call a meeting and only those
Securities specified shall be counted for purposes of determining whether the
required percentage set forth in the second sentence of this paragraph has been
met.
(b) Except to the extent otherwise provided in the terms of
the Securities, the following provisions shall apply to meetings of Holders of
any class of Securities:
<PAGE>
52
(i) notice of any such meeting shall be given to all the
Holders of Securities having a right to vote thereat at least 7 days
and not more than 60 days before the date of such meeting. Whenever a
vote, consent or approval of Holders is permitted or required under
this Declaration or the rules of any stock exchange on which the
Capital Securities are listed or admitted for trading, such vote,
consent or approval may be given at a meeting of such Holders. Any
action that may be taken at a meeting of Holders may be taken without a
meeting if a consent in writing setting forth the action so taken is
signed by Holders owning not less than the minimum amount of Securities
in liquidation amount that would be necessary to authorize or take such
action at a meeting at which all Holders of Securities having a right
to vote thereon were present and voting. Prompt notice of the taking of
action without a meeting shall be given to the Holders of Securities
entitled to vote who have not consented in writing. The Regular
Trustees may specify that any written consent submitted to Holders for
the purpose of taking any action without a meeting shall be returned to
the Trust within the time specified by the Regular Trustees;
(ii) each Holder may authorize any Person to act for it by
proxy on all matters in which such Holder is entitled to participate,
including waiving notice of any meeting, or voting or participating at
a meeting. No proxy shall be valid after the expiration of 11 months
from the date thereof unless otherwise provided in the proxy. Every
proxy shall be revocable at the pleasure of the Holder executing it.
Except as otherwise provided herein, all matters relating to the
giving, voting or validity of proxies shall be governed by the General
Corporation Law of the State of Delaware relating to proxies, and
judicial interpretations thereunder, as if the Trust were a Delaware
corporation and the Holders were stockholders of a Delaware
corporation;
(iii) each meeting of Holders shall be conducted by the Regular
Trustees or by such other Person that the Regular Trustees may
designate; and
(iv) unless the Business Trust Act, this Declaration, the
terms of the Securities, the Trust Indenture Act or the listing rules
of any stock exchange on which the Capital Securities are then listed
or trading otherwise provides, the Regular Trustees, in their sole
discretion, shall establish all other provisions relating to meetings
<PAGE>
53
of Holders, including notice of the time, place or purpose of any
meeting at which any matter is to be voted on by any Holders, waiver of
any such notice, action by consent without a meeting, the establishment
of a record date, quorum requirements, voting in person or by proxy or
any other matter with respect to the exercise of any such right to
vote.
ARTICLE XIII
REPRESENTATIONS OF PROPERTY TRUSTEE AND DELAWARE TRUSTEE
SECTION 13.1. REPRESENTATIONS AND WARRANTIES OF PROPERTY TRUSTEE.
The Trustee that acts as initial Property Trustee represents
and warrants to the Trust and to the Sponsor at the date of this Declaration,
and each successor Property Trustee represents and warrants to the Trust and the
Sponsor at the time of the successor Property Trustee's acceptance of its
appointment as Property Trustee, that:
(a) the Property Trustee is a banking corporation or
association with trust powers, duly organized, validly existing and in
good standing under the laws of a state of the United States or of the
United States, with trust power and authority to execute and deliver,
and to carry out and perform its obligations under the terms of, the
Declaration;
(b) the execution, delivery and performance by the Property
Trustee of the Declaration has been duly authorized by all necessary
corporate action on the part of the Property Trustee. The Declaration
has been duly executed and delivered by the Property Trustee, and it
constitutes a legal, valid and binding obligation of the Property
Trustee, enforceable against it in accordance with its terms, subject
to applicable bankruptcy, reorganization, moratorium, insolvency, and
other similar laws affecting creditors' rights generally and to general
principles of equity and the discretion of the court (regardless of
whether the enforcement of such remedies is considered in a proceeding
in equity or at law);
(c) the execution, delivery and performance of the Declaration
by the Property Trustee does not conflict with
<PAGE>
54
or constitute a breach of the charter or by-laws of the Property
Trustee; and
(d) no consent, approval or authorization of, or registration
with or notice to, any New York State or Federal banking authority is
required for the execution, delivery or performance by the Property
Trustee of the Declaration.
SECTION 13.2. REPRESENTATIONS AND WARRANTIES OF DELAWARE TRUSTEE.
The Trustee that acts as initial Delaware Trustee represents
and warrants to the Trust and to the Sponsor at the date of this Declaration,
and each Successor Delaware Trustee represents and warrants to the Trust and the
Sponsor at the time of the Successor Delaware Trustee's acceptance of its
appointment as Delaware Trustee, that:
(a) the Delaware Trustee is a Delaware banking corporation
with trust powers, duly organized, validly existing and in good
standing under the laws of the State of Delaware, with trust power and
authority to execute and deliver, and to carry out and perform its
obligations under the terms of, the Declaration;
(b) the Delaware Trustee has been authorized to perform its
obligations under the Certificate of Trust and the Declaration. The
Declaration under Delaware law constitutes a legal, valid and binding
obligation of the Delaware Trustee, enforceable against it in
accordance with its terms, subject to applicable bankruptcy,
reorganization, moratorium, insolvency, and other similar laws
affecting creditors' rights generally and to general principles of
equity and the discretion of the court (regardless of whether the
enforcement of such remedies is considered in a proceeding in equity or
at law);
(c) no consent, approval or authorization of, or registration
with or notice to, any Delaware State or Federal banking authority is
required for the execution, delivery or performance by the Delaware
Trustee of the Declaration; and
(d) the Delaware Trustee is a natural person who is a resident
of the State of Delaware or, if not a natural person, an entity which
has its principal place of business in the State of Delaware.
<PAGE>
55
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1. NOTICES.
All notices provided for in this Declaration shall be in
writing, duly signed by the party giving such notice, and shall be delivered,
telecopied or mailed by first class mail, as follows:
(a) if given to the Trust, in care of the Regular Trustees at
the Trust's mailing address set forth below (or such other address as
the Trust may give notice of to the Holders):
c/o M.D.C. Holdings, Inc.
3600 S. Yosemite Street
Suite 900
Denver, Colorado 80237
Attention:
(b) if given to the Delaware Trustee, at the mailing address
set forth below (or such other address as the Delaware Trustee may give
notice of to the Holders):
Attention:
(c) if given to the Property Trustee, at the mailing address
set forth below (or such other address as the Property Trustee may give
notice of to the Holders):
[ ]
Attention:
(d) if given to the Holder of the Common Securities, at the
mailing address of the Sponsor set forth below (or such other address
as the Holder of the Common Securities may give notice of to the
Trust):
<PAGE>
56
M.D.C. Holdings, Inc.
3600 S. Yosemite Street
Suite 900
Denver, Colorado 80237
Attention:
(e) if given to any other Holder, at the address set forth on
the books and records of the Trust.
All such notices shall be deemed to have been given when
received.
SECTION 14.2. GOVERNING LAW.
This Declaration and the rights of the parties hereunder shall
be governed by and interpreted in accordance with the laws of the State of
Delaware and all rights and remedies shall be governed by such laws without
regard to principles of conflict of laws.
SECTION 14.3. INTENTION OF THE PARTIES.
It is the intention of the parties hereto that the Trust be
classified for United States federal income tax purposes as a grantor trust. The
provisions of this Declaration shall be interpreted to further this intention of
the parties.
SECTION 14.4. HEADINGS.
Headings contained in this Declaration are inserted for
convenience of reference only and do not affect the interpretation of this
Declaration or any provision hereof.
SECTION 14.5. SUCCESSORS AND ASSIGNS.
Whenever in this Declaration any of the parties hereto is
named or referred to, the successors and assigns of such party shall be deemed
to be included, and all covenants and agreements in this Declaration by the
Sponsor and the Trustees shall bind and inure to the benefit of their respective
successors and assigns, whether so expressed.
SECTION 14.6. PARTIAL ENFORCEABILITY.
If any provision of this Declaration, or the application of
such provision to any Person or circumstance, shall be held invalid, the
remainder of this Declaration, or the application of such provision to persons
or circumstances other than
<PAGE>
57
those to which it is held invalid, shall not be affected thereby.
SECTION 14.7. COUNTERPARTS.
This Declaration may contain more than one counterpart of the
signature page and this Declaration may be executed by the affixing of the
signature of each of the Trustees to one of such counterpart signature pages.
All of such counterpart signature pages shall be read as though one, and they
shall have the same force and effect as though all of the signers had signed a
single signature page.
<PAGE>
58
IN WITNESS WHEREOF, the undersigned has caused this
Declaration to be executed as of the day and year first above written.
---------------------------------
, as Trustee
---------------------------------
, as Trustee
----------------------------
, as Trustee
[ ],
as Delaware Trustee
By:
---------------------------------
Name:
Title:
[ ],
as Property Trustee
By:
---------------------------------
Name:
Title:
M.D.C. HOLDINGS, INC.,
as Sponsor
By:
---------------------------------
Name:
Title:
<PAGE>
ANNEX I
TERMS OF
CAPITAL SECURITIES
COMMON SECURITIES
Further to Section 7.1 of the Amended and Restated Declaration
of Trust, dated as of , 1999 (as amended from time to time, the "Declaration"),
the designation, rights, privileges, restrictions, preferences and other terms
and provisions of the Capital Securities and the Common Securities are set out
below (each capitalized term used but not defined herein has the meaning set
forth in the Declaration or, if not defined in such Declaration, as defined in
the Prospectus referred to below):
(1) DESIGNATION AND AMOUNT.
(a) CAPITAL SECURITIES. Capital Securities of the Trust
with an aggregate liquidation amount with respect to the assets of the Trust
of [ ]United States dollars ($[ ]) and a liquidation amount with
respect to the assets of the Trust of $ per Capital Security, are hereby
designated for the purposes of identification only as " " (" "
or the "Capital Securities"). The Capital Security Certificates evidencing the
Capital Securities shall be substantially in the form of Exhibit A-1 to the
Declaration, with such changes and additions thereto or deletions therefrom as
may be required by ordinary usage, custom or practice or to conform to the rules
of any stock exchange on which the Capital Securities are listed.
(b) COMMON SECURITIES. Common Securities of the Trust with
an aggregate liquidation amount with respect to the assets of the Trust of
United States dollars ($ ) and a liquidation amount with
respect to the assets of the Trust of $ per common security, are hereby
designated for the purposes of identification only as "Common Securities"
(the "Common Securities"). The Common Security Certificates evidencing the
Common Securities shall be substantially in the form of Exhibit A-2 to the
Declaration, with such changes and additions thereto or deletions therefrom
as may be required by ordinary usage, custom or practice.
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(2) DISTRIBUTIONS.
(a) Distributions payable on each Security will be fixed at a
rate per annum of % (the "Coupon Rate") of the stated liquidation amount of
$ per Security, such rate being the rate of interest payable on the Trust
Debentures to be held by the Property Trustee. Distributions in arrears for more
than one quarter will bear interest thereon compounded quarterly at the Coupon
Rate (to the extent permitted by applicable law). The term "Distributions" as
used herein includes such cash distributions and any such interest payable
unless otherwise stated. A Distribution is payable only to the extent that
payments are made in respect of the Trust Debentures held by the Property
Trustee and to the extent the Property Trustee has funds available therefor in
the Payment Account. The amount of Distributions payable for any period will be
computed for any full quarterly Distribution period on the basis of a 360-day
year of twelve 30-day months, and for any period shorter than a full quarterly
Distribution period for which Distributions are computed, Distributions will be
computed on the basis of the actual number of days elapsed per 90-day quarter.
(b) Distributions on the Securities will be cumulative,
will accrue from the date of original issuance, and will be payable quarterly
in arrears, on March 31, June 30, September 30 and December 31 of each year,
commencing on [ ], except as otherwise described below. The
Distribution payable on [ ], [ ], which will be based on a period
shorter than a full quarter, will be in an amount of $ per Capital
Security. The Trust Debenture Issuer has the right under the Indenture to
defer payments of interest by extending the interest payment period from time
to time on the Trust Debentures for a period not exceeding 20 consecutive
quarters (each an "Extension Period"), PROVIDED that no Extension Period
shall last beyond the date of maturity of the Trust Debentures. As a
consequence of such deferral, Distributions will also be deferred. Despite
such deferral, quarterly Distributions will continue to accrue with interest
thereon at the Coupon Rate compounded quarterly during any such Extension
Period. Prior to the termination of any such Extension Period (to the extent
permitted by applicable law), the Trust Debenture Issuer may further extend
such Extension Period; PROVIDED that such Extension Period together with all
previous and such further extensions thereof may not exceed 20 consecutive
quarters or last beyond the date of maturity of the Trust Debentures.
Payments of accrued Distributions will be payable to Holders as they appear
on the books and records of the Trust on the first record
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<PAGE>
date for the payment of Distributions after the end of the Extension Period.
Upon the termination of any Extension Period and the payment of all amounts then
due, the Trust Debenture Issuer may commence a new Extension Period, subject to
the above requirements.
(c) Distributions on the Securities will be payable to the
Holders thereof as they appear on the books and records of the Trust on the
relevant record dates. While the Capital Securities remain in book-entry only
form, the relevant record dates shall be one Business Day prior to the relevant
payment dates which payment dates correspond to the interest payment dates on
the Trust Debentures. Subject to any applicable laws and regulations and the
provisions of the Declaration, each such payment in respect of the Capital
Securities will be made as described in the book-entry provisions of the
prospectus supplement relating to the Capital Securities in the form first
delivered to investors to confirm sales (the "Prospectus Supplement"). The
relevant record dates for the Common Securities shall be the same record dates
as for the Capital Securities. If the Capital Securities shall not continue to
remain in book-entry only form, the relevant record dates for the Capital
Securities shall conform to the rules of any securities exchange on which such
securities are listed and, if none, shall be selected by the Regular Trustees,
which dates shall be at least one Business Day but less than 60 Business Days
before the relevant payment dates, which payment dates correspond to the
interest payment dates on the Trust Debentures. Distributions payable on any
Securities that are not punctually paid on any Distribution payment date, as a
result of the Trust Debenture Issuer having failed to make a payment under the
Trust Debentures, will cease to be payable to the Person in whose name such
Securities are registered on the relevant regular record date, and such
defaulted Distribution will instead be payable to the Person in whose name such
Securities are registered on the special record date or other specified date
determined in accordance with the Indenture for the making of such payment. If
any date on which Distributions are payable on the Securities is not a Business
Day, then payment of the Distribution payable on such date will be made on the
next succeeding day that is a Business Day (and without any interest or other
payment in respect of any such delay) except that, if such Business Day is in
the next succeeding calendar year, such payment shall be made on the immediately
preceding Business Day, in each case with the same force and effect as if made
on such date.
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<PAGE>
(d) In the event that there is any money or other property
held by or for the Trust that is not accounted for hereunder, such property
shall be distributed Pro Rata (as defined herein) among the Holders of the
Securities.
(3) LIQUIDATION DISTRIBUTION UPON DISSOLUTION.
In the event of any voluntary or involuntary dissolution,
winding-up or termination of the Trust, the Holders on the date of the
dissolution, winding-up or termination, as the case may be, will be entitled to
receive out of the assets of the Trust available for distribution to Holders
after satisfaction of liabilities of creditors an amount equal to the aggregate
of the liquidation amount of $[ ] per Security plus accrued and unpaid
Distributions thereon to the date of payment (such amount being the "Liquidation
Distribution"), unless, in connection with such dissolution, winding-up or
termination, Trust Debentures in an aggregate principal amount equal to the
aggregate liquidation amount of such Securities, with an interest rate equal to
the Coupon Rate of, and bearing accrued and unpaid interest in an amount equal
to the accrued and unpaid Distributions on, such Securities, shall be
distributed on a Pro Rata basis to the Holders of the Securities in exchange for
such Securities.
If, upon any such dissolution, the Liquidation Distribution
can be paid only in part because the Trust has insufficient assets available to
pay in full the aggregate Liquidation Distribution, then the amounts payable
directly by the Trust on the Securities shall be paid on a Pro Rata basis.
(4) REDEMPTION AND DISTRIBUTION.
(a) Upon the repayment of the Trust Debentures in whole or
in part, whether at maturity or upon redemption, the proceeds from such
repayment shall be simultaneously applied to redeem Securities having an
aggregate liquidation amount equal to the aggregate principal amount of the
Trust Debentures so repaid or redeemed at a redemption price of $ per
Security plus an amount equal to accrued and unpaid Distributions thereon at
the date of the redemption, payable in cash (the "Redemption Price"). Holders
will be given not less than 30 nor more than 60 days notice of such
redemption.
(b) If fewer than all the outstanding Securities are to be so
redeemed, the Common Securities and the Capital Securities will be redeemed Pro
Rata and the procedure for redeeming
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<PAGE>
Capital Securities will be as described in Section 4(f)(ii) below.
(c) If a Tax Event or an Investment Company Event (each as
defined below, and each a "Special Event") shall occur and be continuing, the
Regular Trustees shall, except in certain limited circumstances in relation to a
Tax Event described in this Section 4(c), dissolve the Trust and, after
satisfaction of liabilities to creditors, cause Trust Debentures held by the
Property Trustee, having an aggregate principal amount equal to the aggregate
stated liquidation amount of, with an interest rate identical to the Coupon Rate
of, and accrued and unpaid interest equal to accrued and unpaid Distributions
on, and having the same record date for payment, as the Securities, to be
distributed to the Holders in liquidation of such Holders' interests in the
Trust on a Pro Rata basis, within 90 days following the occurrence of such
Special Event (the "90 Day Period"); PROVIDED that, as a condition of such
dissolution and distribution, the Regular Trustees shall have received an
opinion of a nationally recognized independent tax counsel experienced in such
matters (a "No Recognition Opinion"), which opinion may rely on published
revenue rulings of the Internal Revenue Service, to the effect that the Holders
will not recognize any gain or loss for United States federal income tax
purposes as a result of the dissolution of the Trust and the distribution of
Trust Debentures, and PROVIDED, FURTHER, that, if at the time there is available
to the Trust the opportunity to eliminate, within the 90 Day Period, the Special
Event by taking some ministerial action, such as filing a form or making an
election, or pursuing some other similar reasonable measure that has no adverse
effect on the Trust, the Trust Debenture Issuer, the Sponsor or the Holders
("Ministerial Action"), the Trust will pursue such Ministerial Action in lieu of
dissolution.
If in the event of a Tax Event (i), after receipt of a Tax
Event Opinion (as defined hereinafter) by the Regular Trustees, the Trust
Debenture Issuer has received an opinion (a "Redemption Tax Opinion") from a
nationally recognized independent tax counsel experienced in such matters that,
as a result of a Tax Event, there is more than an insubstantial risk that the
Trust Debenture Issuer would be precluded from deducting the interest on the
Trust Debentures for United States federal income tax purposes even if the Trust
Debentures were distributed to the Holders in liquidation of such Holders'
interests in the Trust as described in this Section 4(c), or (ii), after receipt
of a Tax Event Opinion, the Regular Trustees
I-5
<PAGE>
shall have been informed by such tax counsel that a No Recognition Opinion
cannot be delivered to the Trust, the Trust Debenture Issuer shall have the
right at any time, upon not less than 30 nor more than 60 days notice, to redeem
the Trust Debentures in whole or in part for cash within 90 days following the
occurrence of such Tax Event, and, following such redemption, Securities with an
aggregate liquidation amount equal to the aggregate principal amount of the
Trust Debentures so redeemed shall be redeemed by the Trust at the Redemption
Price on a Pro Rata basis; PROVIDED that, if at the time there is available to
the Trust the opportunity to eliminate, within such 90 day period, the Tax Event
by taking some Ministerial Action, the Trust or the Trust Debenture Issuer shall
pursue such Ministerial Action in lieu of redemption.
"Tax Event" means that the Regular Trustees shall have
received an opinion from a nationally recognized independent tax counsel
experienced in such matters (a "Tax Event Opinion") to the effect that, on or
after the date of the Prospectus Supplement, as a result of (a) any amendment
to, or change (including any announced prospective change) in, the laws (or any
regulations thereunder) of the United States or any political subdivision or
taxing authority thereof or therein or (b) any amendment to, or change in, an
interpretation or application of any such laws or regulations by any legislative
body, court, governmental agency or regulatory authority, in each case which
amendment or change is enacted, promulgated, issued or announced or which
interpretation or pronouncement is issued or announced or which action is taken,
on or after the date of the Prospectus Supplement, there is more than an
insubstantial risk that (i) the Trust is, or will be within 90 days of the date
thereof, subject to United States federal income tax with respect to interest
accrued or received on the Trust Debentures, (ii) interest payable by the Trust
Debenture Issuer to the Trust on the Trust Debentures is not, or within 90 days
of the date thereof will not be, deductible, in whole or in part, by the Trust
Debenture Issuer for United States federal income tax purposes or (iii) the
Trust is, or will be within 90 days of the date thereof, subject to more than a
de minimis amount of taxes, duties or other governmental charges.
"Investment Company Event" means that the Regular Trustees
shall have received an opinion from a nationally recognized independent counsel
experienced in practice under the Investment Company Act that, as a result of
the occurrence of a change in law or regulation or a written change in
interpretation or application of law or regulation by any legislative
I-6
<PAGE>
body, court, governmental agency or regulatory authority (a "Change in 1940 Act
Law"), there is a more than an insubstantial risk that the Trust is or will be
considered an Investment Company which is required to be registered under the
Investment Company Act, which Change in 1940 Act Law becomes effective on or
after the date of the Prospectus Supplement.
On and from the date fixed by the Regular Trustees for any
distribution of Trust Debentures and dissolution of the Trust: (i) the
Securities will no longer be deemed to be outstanding and (ii) DTC (the
"Depository") or its nominee (or any successor Clearing Agency or its nominee),
as the record Holder of the Capital Securities, will receive a registered global
certificate or certificates representing the Trust Debentures to be delivered
upon such distribution and any certificates representing Securities, except for
certificates representing Capital Securities held by the Depository or its
nominee (or any successor Clearing Agency or its nominee), will be deemed to
represent beneficial interests in the Trust Debentures having an aggregate
principal amount equal to the aggregate stated liquidation amount of, with an
interest rate identical to the Coupon Rate of, and accrued and unpaid interest
equal to accrued and unpaid Distributions on such Securities until such
certificates are surrendered or presented to the Trust Debenture Issuer or its
agent for transfer or reissue.
(d) The Trust may not redeem fewer than all the outstanding
Securities unless all accrued and unpaid Distributions have been paid on all
Securities for all quarterly Distribution periods terminating on or before the
date of redemption.
(e) If the Trust Debentures are distributed to holders of the
Securities, pursuant to the terms of the Indenture the Trust Debenture Issuer
will use its best efforts to have the Trust Debentures listed on the New York
Stock Exchange, Inc. or on such other national securities exchange or with The
Nasdaq Stock Market or such other organization as the Capital Securities were
listed immediately prior to the distribution of the Trust Debentures.
(f) The following provisions shall apply to any call for
redemption of Securities or any distribution of Trust Debentures to Holders:
(i) Notice of any redemption of, or notice of distribution of
Trust Debentures in exchange for, Securities (a
"Redemption/Distribution Notice") will be given by the
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<PAGE>
Trust by mail to each Holder of Securities to be redeemed or exchanged
not fewer than 30 nor more than 60 days before the date fixed for
redemption or exchange thereof which, in the case of a redemption, will
be the date fixed for redemption of the Trust Debentures. For purposes
of the calculation of the date of redemption or exchange and the dates
on which notices are given pursuant to this Section 4(f)(i), a
Redemption/Distribution Notice shall be deemed to be given on the day
such notice is first mailed by first-class mail, postage prepaid, to
Holders. Each Redemption/Distribution Notice shall be addressed to each
Holder at the address of such Holder appearing in the books and records
of the Trust. No defect in the Redemption/Distribution Notice or in the
mailing of either thereof with respect to any Holder shall affect the
validity of the redemption or exchange proceedings with respect to any
other Holder.
(ii) In the event that fewer than all the outstanding
Securities are to be redeemed, the Securities to be redeemed shall be
redeemed Pro Rata from each Holder of Securities, it being understood
that in respect of Capital Securities registered in the name of and
held of record by the Depository or its nominee (or any successor
Clearing Agency or its nominee), the distribution of the proceeds of
such redemption will be made to each Clearing Agency Participant (or
Person on whose behalf such Clearing Agency or nominee holds such
securities) by lot in accordance with the procedures applied by such
agency or nominee.
(iii) If Securities are to be redeemed and the Trust gives a
Redemption/Distribution Notice, which notice may be issued only if the
Trust Debentures are redeemed as set out in this Section 4 (which
notice will be irrevocable), then (A) while the Capital Securities are
in book-entry only form, with respect to the Capital Securities, by
12:00 noon, New York City time, on the redemption date, the Property
Trustee will deposit irrevocably with the Depository or its nominee (or
successor Clearing Agency or its nominee) immediately available funds
sufficient to pay the applicable Redemption Price with respect to the
Capital Securities and will give the Depository irrevocable
instructions and authority to pay the Redemption Price to the Holders
of the Capital Securities; PROVIDED that the Trust Debenture Issuer has
deposited with the Property Trustee a sufficient amount of cash in
connection with the
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related redemption or maturity of the Trust Debentures by 10:00 a.m.,
New York City time, on the redemption date, and (B) with respect to
Capital Securities issued in definitive form and Common Securities, the
Property Trustee will pay the relevant Redemption Price to the Holders
of such Securities by check mailed to the address of the relevant
Holder appearing on the books and records of the Trust on the
redemption date; PROVIDED that the Trust Debenture Issuer has deposited
with the Property Trustee a sufficient amount of cash in connection
with the related redemption or maturity of the Trust Debentures, prior
to such mailing. If a Redemption/Distribution Notice shall have been
given and funds deposited with the Property Trustee on or before the
redemption date as required, then immediately prior to the close of
business on the redemption date Distributions will cease to accrue on
the Securities so called for redemption and all rights of Holders of
such Securities so called for redemption will cease, except the right
of the Holders of such Securities to receive the Redemption Price, but
without interest on such Redemption Price. Neither the Regular Trustees
nor the Trust shall be required to register or cause to be registered
the transfer of any Securities that have been so called for redemption.
If any date fixed for redemption of Securities is not a Business Day,
then payment of the Redemption Price payable on such date will be made
on the next succeeding day that is a Business Day (and without any
interest or other payment in respect of any such delay) except that, if
such Business Day falls in the next calendar year, such payment will be
made on the immediately preceding Business Day, in each case with the
same force and effect as if made on such date fixed for redemption. If
payment of the Redemption Price in respect of any Securities is
improperly withheld or refused and not paid on the redemption date
either by the Property Trustee or by the Sponsor as guarantor pursuant
to the relevant Securities Guarantee, Distributions on such Securities
will continue to accrue from the original redemption date to the actual
date of payment, in which case the actual payment date will be
considered the date fixed for redemption for purposes of calculating
the Redemption Price.
(iv) Redemption/Distribution Notices shall be sent by the
Regular Trustees on behalf of the Trust to (A) in respect of the
Capital Securities, the Depository or its nominee (or any successor
Clearing Agency or its nominee) if the Global Certificates have been
issued or, if Definitive
I-9
<PAGE>
Capital Security Certificates have been issued, to the Holders thereof
at their addresses appearing on the books and records of the Trust, and
(B) in respect of the Common Securities to the Holder thereof.
(v) Subject to the foregoing and applicable law (including,
without limitation, United States federal securities laws), the Sponsor
or any of its subsidiaries may at any time and from time to time
purchase outstanding Capital Securities by tender, in the open market
or by private agreement.
(5) VOTING RIGHTS - CAPITAL SECURITIES.
(a) Except as provided under Sections 5(b) and 7 and as
otherwise required by law and the Declaration, the Holders of the Capital
Securities will have no voting rights.
(b) Subject to the requirements set forth in this paragraph,
the Holders of a Majority in liquidation amount of the Capital Securities,
voting separately as a class, may direct the time, method, and place of
conducting any proceeding for any remedy available to the Property Trustee, or
exercising any trust or power conferred upon the Property Trustee under the
Declaration, including (i) directing the time, method, place of conducting any
proceeding for any remedy available to the Trust Debenture Trustee, or
exercising any trust or power conferred on the Trust Debenture Trustee with
respect to the Trust Debentures, (ii) waive any past default and its
consequences that is waivable under [Section 6.04] of the Indenture, or (iii)
exercise any right to rescind or annul a declaration that the principal of all
the Trust Debentures shall be due and payable; PROVIDED that where a consent
under the Indenture would require the consent or act of the Holders of greater
than a majority in principal amount of Trust Debentures affected thereby (a
"Super Majority"), the Property Trustee may give such consent or take such
action only at the direction of the Holders of at least the proportion in
liquidation amount of the Capital Securities outstanding which the relevant
Super Majority represents of the aggregate principal amount of the Trust
Debentures outstanding. The Property Trustee shall not revoke any action
previously authorized or approved by a vote of the Holders of the Capital
Securities. Other than with respect to directing the time, method and place of
conducting any remedy available to the Property Trustee or the Trust Debenture
Trustee as set forth above, the Property Trustee shall not take any action in
accordance with the directions of the Holders of the
I-10
<PAGE>
Capital Securities under this paragraph unless the Property Trustee has received
an opinion of tax counsel to the effect that for the purposes of United States
federal income tax the Trust will not be classified as other than a grantor
trust on account of such action. If the Property Trustee fails to enforce its
rights under the Declaration, any Holder of Capital Securities may, to the
extent permitted by applicable law, institute a legal proceeding directly
against any Person to enforce the Property Trustee's rights under the
Declaration without first instituting a legal proceeding against the Property
Trustee or any other Person. If an Event of Default occurs that results from the
failure of the Trust Debenture Issuer to pay principal of or interest on the
Trust Debentures when due, then during the continuance of such Event of Default
each Holder of Capital Securities may directly institute proceedings against the
Trust Debenture Issuer to obtain payment to such Holder of an amount equal to
the principal or interest so defaulted on with respect to Trust Debentures in a
principal amount equal to the aggregate liquidation amount of the Capital
Securities owned by such Holder. No Holder of Capital Securities will be
entitled to exercise directly against the Trust Debenture Issuer any other
remedy available to the Property Trustee, as the record holder of the Trust
Debentures, unless the Property Trustee first fails to exercise such remedy.
Any approval or direction of Holders of Capital Securities may
be given at a separate meeting of Holders of Capital Securities convened for
such purpose, at a meeting of all of the Holders of Securities in the Trust or
pursuant to written consent. The Regular Trustees will cause a notice of any
meeting at which Holders of Capital Securities are entitled to vote, or of any
matter upon which action by written consent of such Holders is to be taken, to
be mailed to each Holder of record of Capital Securities. Each such notice will
include a statement setting forth (i) the date of such meeting or the date by
which such action is to be taken, (ii) a description of any resolution proposed
for adoption at such meeting on which such Holders are entitled to vote or of
such matter upon which written consent is sought and (iii) instructions for the
delivery of proxies or consents.
No vote or consent of the Holders of the Capital Securities
will be required for the Trust to redeem and cancel Capital Securities or to
distribute the Trust Debentures in accordance with the Declaration and the terms
of the Securities.
I-11
<PAGE>
Notwithstanding that Holders of Capital Securities are
entitled to vote or consent under any of the circumstances described above, any
of the Capital Securities that are owned by the Sponsor or any Affiliate of the
Sponsor shall not be entitled to vote or consent and shall, for purposes of such
vote or consent, be treated as if they were not outstanding.
(6) VOTING RIGHTS - COMMON SECURITIES.
(a) Except as provided under Sections 6(b), (c) and 7 or as
otherwise required by law and the Declaration, the Holders of the Common
Securities will have no voting rights.
(b) The Holders of the Common Securities are entitled, in
accordance with Article V of the Declaration, to vote to appoint, remove or
replace any Trustee or to increase or decrease the number of Trustees.
(c) Subject to Section 2.6 of the Declaration and only after
all Events of Default with respect to the Capital Securities have been cured,
waived, or otherwise eliminated and subject to the requirements of the
penultimate sentence of this paragraph, the Holders of a Majority in liquidation
amount of the Common Securities, voting separately as a class, may direct the
time, method, and place of conducting any proceeding for any remedy available to
the Property Trustee, or exercising any trust or power conferred upon the
Property Trustee under the Declaration, including (i) directing the time,
method, place of conducting any proceeding for any remedy available to the Trust
Debenture Trustee, or exercising any trust or power conferred on the Trust
Debenture Trustee with respect to the Trust Debentures, (ii) waive any past
default and its consequences that is waivable under [Section 6.04] of the
Indenture, or (iii) exercise any right to rescind or annul a declaration that
the principal of all the Trust Debentures shall be due and payable; PROVIDED
that where a consent or action under the Indenture would require the consent or
act of the Holders of a Super Majority, the Property Trustee may give such
consent or take such action only at the direction of the Holders of at least the
proportion in liquidation amount of the Common Securities outstanding which the
relevant Super Majority represents of the aggregate principal amount of the
Trust Debentures outstanding. Notwithstanding any vote pursuant to this Section
6(c), the Property Trustee shall not revoke any action previously authorized or
approved by a vote of the Holders of the Capital Securities. Other than with
respect to directing the time, method and place of conducting any remedy
available to the Property
I-12
<PAGE>
Trustee or the Trust Debenture Trustee as set forth above, the Property Trustee
shall not take any action in accordance with the directions of the Holders of
the Common Securities under this paragraph unless the Property Trustee has
received an opinion of tax counsel to the effect that for the purposes of United
States federal income tax the Trust will not be classified as other than a
grantor trust on account of such action. If the Property Trustee fails to
enforce its rights under the Declaration, any Holder of Common Securities, to
the extent permitted by applicable law, may institute a legal proceeding
directly against any Person to enforce the Property Trustee's rights under the
Declaration, without first instituting a legal proceeding against the Property
Trustee or any other Person.
Any approval or direction of Holders of Common Securities may
be given at a separate meeting of Holders of Common Securities convened for such
purpose, at a meeting of all of the Holders of Securities in the Trust or
pursuant to written consent. The Regular Trustees will cause a notice of any
meeting at which Holders of Common Securities are entitled to vote, or of any
matter upon which action by written consent of such Holders is to be taken, to
be mailed to each Holder of record of Common Securities. Each such notice will
include a statement setting forth (i) the date of such meeting or the date by
which such action is to be taken, (ii) a description of any resolution proposed
for adoption at such meeting on which such Holders are entitled to vote or of
such matter upon which written consent is sought and (iii) instructions for the
delivery of proxies or consents.
No vote or consent of the Holders of the Common Securities
will be required for the Trust to redeem and cancel Common Securities or to
distribute the Trust Debentures in accordance with the Declaration and the terms
of the Securities.
(7) AMENDMENTS TO DECLARATION AND INDENTURE.
(a) In addition to any requirements under Section 12.1 of the
Declaration, if any proposed amendment to the Declaration provides for, or the
Regular Trustees otherwise propose to effect, (i) any action that would
adversely affect the powers, preferences or special rights of the Securities,
whether by way of amendment to the Declaration or otherwise, or (ii) the
dissolution, winding-up or termination of the Trust, other than under the
circumstances described in Section 8.1 of the Declaration, then the Holders of
outstanding Securities will be entitled to vote on such amendment or proposal
(but not
I-13
<PAGE>
on any other amendment or proposal) and such amendment or proposal shall not be
effective except with the approval of the Holders of at least a Majority in
liquidation amount of the Securities, voting together as a single class;
PROVIDED that, if any amendment or proposal referred to in clause (i) above
would adversely affect only the Capital Securities or only the Common
Securities, then only the affected class will be entitled to vote on such
amendment or proposal and such amendment or proposal shall not be effective
except with the approval of a Majority in liquidation amount of such class of
Securities.
(b) In the event the consent of the Property Trustee as the
holder of the Trust Debentures is required under the Indenture with respect to
any amendment or modification of the Indenture or the Trust Debentures, the
Property Trustee shall request the direction of the Holders of the Securities
with respect to such amendment or modification and shall vote with respect to
such amendment or modification as directed by a Majority in liquidation amount
of the Securities voting together as a single class; PROVIDED that where a
consent under the Indenture would require the consent of the holders of a Super
Majority, the Property Trustee may give such consent only at the direction of
the Holders of at least the proportion in liquidation amount of the Securities
which the relevant Super Majority represents of the aggregate principal amount
of the Trust Debentures outstanding; PROVIDED, FURTHER, that the Property
Trustee shall not take any action in accordance with the directions of the
Holders of the Securities under this Section 7(b) unless the Property Trustee
has received an opinion of tax counsel to the effect that for the purposes of
United States federal income tax the Trust will not be classified as other than
a grantor trust on account of such action.
(8) PRO RATA.
A reference in these terms of the Securities to any payment,
distribution or treatment as being "Pro Rata" shall mean pro rata to each Holder
of Securities according to the aggregate liquidation amount of the Securities
held by the relevant Holder in relation to the aggregate liquidation amount of
all Securities outstanding unless, in relation to a payment, an Event of Default
under the Declaration in respect of the Capital Securities has occurred and is
continuing, in which case any funds available to make such payment shall be paid
first to each Holder of the Capital Securities pro rata according to the
aggregate liquidation amount of Capital Securities held by the relevant Holder
relative to the aggregate liquidation amount of
I-14
<PAGE>
all Capital Securities outstanding, and only after satisfaction of all amounts
owed to the Holders of the Capital Securities, then to each Holder of Common
Securities pro rata according to the aggregate liquidation amount of Common
Securities held by the relevant Holder relative to the aggregate liquidation
amount of all Common Securities outstanding.
(9) RANKING.
The Capital Securities rank PARI PASSU, and payment thereon
shall be made Pro Rata, with the Common Securities except that, where an Event
of Default occurs and is continuing under the Indenture in respect of the Trust
Debentures held by the Property Trustee, the rights of Holders of the Common
Securities to payment in respect of Distributions and payments upon liquidation,
redemption and otherwise are subordinated to the rights to payment of the
Holders of the Capital Securities.
(10) LISTING.
The Regular Trustees and the Sponsor shall use their best
efforts to cause the Capital Securities to be listed for quotation on the New
York Stock Exchange, Inc.
(11) ACCEPTANCE OF SECURITIES GUARANTEE AND INDENTURE.
Each Holder of Capital Securities and Common Securities, by
the acceptance thereof, agrees to the provisions of the Capital Securities
Guarantee and the Common Securities Guarantee, respectively, and to the
provisions of the Indenture, including the subordination provisions of each
document.
(12) NO PREEMPTIVE RIGHTS.
The Holders of the Securities shall have no preemptive rights
to subscribe for any additional securities.
(13) MISCELLANEOUS.
These terms constitute a part of the Declaration.
The Sponsor will provide a copy of the Declaration, the
Capital Securities Guarantee or the Common Securities Guarantee (as may be
appropriate) and the Indenture to a Holder without charge on written request to
the Sponsor at its principal place of business.
I-15
<PAGE>
(14) AGREEMENT OF HOLDERS AND CAPITAL SECURITY BENEFICIAL
OWNERS.
Every Person who becomes a Holder or a Capital Security
Beneficial Owner shall be deemed to have agreed to treat the Trust Debentures as
indebtedness for United States federal income tax purposes and the Capital
Securities as evidence of an indirect beneficial ownership in the Trust
Debentures.
I-16
<PAGE>
EXHIBIT A-1
FORM OF CAPITAL SECURITY CERTIFICATE
[IF THE CAPITAL SECURITY IS TO BE A GLOBAL CERTIFICATE INSERT
- - This Capital Security is a Global Certificate within the meaning of the
Declaration hereinafter referred to and is registered in the name of The
Depository Trust Company (the "Depositary") or a nominee of the Depositary. This
Capital Security is exchangeable for Capital Securities registered in the name
of a person other than the Depositary or its nominee only in the limited
circumstances described in the Declaration and no transfer of this Capital
Security (other than a transfer of this Capital Security as a whole by the
Depositary to a nominee of the Depositary or by a nominee of the Depositary to
the Depositary or another nominee of the Depositary) may be registered except in
limited circumstances.
Unless this Capital Security is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New York, New
York) to the Trust or its agent for registration of transfer, exchange or
payment, and any Capital Security issued is registered in the name of Cede & Co.
or such other name as requested by an authorized representative of The
Depository Trust Company and any payment hereon is made to Cede & Co., ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS
WRONGFUL since the registered owner hereof, Cede & Co., has an interest herein.]
Certificate Number: Number of Capital Securities
CUSIP NO.
Certificate Evidencing Capital Securities
of
MDC CAPITAL FUNDING TRUST [ ]
[title of security]
(liquidation amount $[ ] per Capital Security)
MDC Capital Funding Trust [ ], a statutory business trust
formed under the laws of the State of Delaware (the
A1-1
<PAGE>
"Trust"), hereby certifies that ______________ (the "Holder") is the
registered owner of _______ Capital Securities of the Trust representing an
undivided beneficial interest in the assets of the Trust designated the
[ ] (liquidation amount $[ ] per Capital Security) ("
SM" or the "Capital Securities"). The Capital Securities are transferable on
the books and records of the Trust, in person or by a duly authorized
attorney, upon surrender of this certificate duly endorsed and in proper form
for transfer. The designations, rights, privileges, restrictions, preferences
and other terms and provisions of the Capital Securities are set forth in,
and this certificate and the Capital Securities represented hereby are issued
and shall in all respects be subject to the terms and provisions of, the
Amended and Restated Declaration of Trust of the Trust dated as of
[ ], [ ], as the same may be amended from time to time (the
"Declaration") including the designation of the terms of Capital Securities
as set forth in Annex I to the Declaration. The Capital Securities and the
Common Securities (as defined in the Declaration) issued by the Trust
pursuant to the Declaration represent undivided beneficial interests in the
assets of the Trust, including the Trust Debentures (as defined in the
Declaration) issued by M.D.C. Holdings, Inc., a Delaware corporation (the
"Trust Debenture Issuer"), to the Trust pursuant to the Indenture referred to
in the Declaration. The Holder is entitled to the benefits of the Capital
Securities Guarantee Agreement of the Trust Debenture Issuer dated as of
[ ], [ ] (the "Guarantee") to the extent provided therein. The
Trust will furnish a copy of the Declaration, the Guarantee and the Indenture
to the Holder without charge upon written request to the Trust at its
principal place of business or registered office.
The Holder of this certificate, by accepting this certificate,
is deemed to have: (i) agreed to the terms of the Indenture and the Trust
Debentures, including that the Trust Debentures are subordinate and junior in
right to payment to all Senior Indebtedness (as defined in the Indenture) as and
to the extent provided in the Indenture; (ii) agreed to the terms of the
Guarantee; and (iii) agreed to treat the Trust Debentures as indebtedness for
United States federal income tax purposes and the Capital Securities as evidence
of an indirect beneficial ownership of the Trust Debentures.
This certificate and the rights of the parties hereunder shall
be governed by and interpreted in accordance with the laws of the State of
Delaware and all rights and remedies shall be governed by such laws without
regard to principles of conflict of laws.
A1-2
<PAGE>
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
A1-3
<PAGE>
IN WITNESS WHEREOF, the undersigned Regular Trustees of the
Trust have executed this certificate for and on behalf of the Trust.
Dated:
MDC CAPITAL FUNDING TRUST [ ]
By:
----------------------------------
Regular Trustee
By:
----------------------------------
Regular Trustee
By:
----------------------------------
Regular Trustee
COUNTERSIGNED AND REGISTERED:
[ ]
( )
Transfer Agent and Registrar
By:
----------------------------------
Authorized Signature
A1-4
<PAGE>
The following abbreviations, when used in the inscription on the face of this
certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM --as tenants in common UNIF GIFT ACT ___ Custodian ___
TEN ENT --as tenants by the entireties (Cust) (Minor)
JT TEN --as joint tenants with Under Uniform Gifts to Minors
right of survivorship and Act _________
not as tenants in common State)
Additional abbreviations may also be used though not in the
above list.
---------------------
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFICATION NUMBER
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Please print or typewrite name(s) and address(es)
including postal zip code(s), of assignee(s)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
_______ of the Capital Securities represented by this
Certificate and does hereby irrevocably appoint
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
attorney to transfer such Capital Securities on the books of the Trust.
The attorney may substitute another to act for him or her.
Date:
----------------------
A1-5
<PAGE>
Signature:
----------------------
(Sign exactly as your name appears on the other side of this Capital Security
Certificate)
Signature:
----------------------
(Sign exactly as your name appears on the other side of this Capital Security
Certificate)
*IMPORTANT READ CAREFULLY!
The signature(s) to this assignment must correspond with the name(s) as written
upon the face of the certificate in every particular without alteration,
enlargement or change whatsoever. The signature(s) of the person(s) executing
this power must be guaranteed by an eligible guarantor institution which, at the
time of issuing the guarantee, is a member of, or a participant in the medallion
signature guarantee program recognized by the Securities Transfer Association.
A1-6
<PAGE>
EXHIBIT A-2
FORM OF COMMON SECURITY CERTIFICATE
Certificate Number: Number of Common Securities:
Certificate Evidencing Common Securities
of
MDC CAPITAL FUNDING TRUST [ ]
Common Securities
(liquidation amount $ per Common Security)
MDC Capital Funding Trust [ ], a statutory business trust
formed under the laws of the State of Delaware (the "Trust"), hereby certifies
that _________________ (the "Holder") is the registered owner of common
securities of the Trust representing undivided beneficial interests in the
assets of the Trust designated the Common Securities (liquidation amount $
per Common Security) (the "Common Securities"). The Common Securities are
transferable on the books and records of the Trust, in person or by a duly
authorized attorney, upon surrender of this certificate duly endorsed and in
proper form for transfer. The designation, rights, privileges, restrictions,
preferences and other terms and provisions of the Common Securities represented
hereby are issued and shall in all respects be subject to the provisions of the
Amended and Restated Declaration of Trust of the Trust dated as of [ ],
[ ], as the same may be amended from time to time (the "Declaration"),
including the designation of the terms of the Common Securities as set forth in
Annex I to the Declaration. Capitalized terms used herein but not defined shall
have the meaning given them in the Declaration. The Holder is entitled to the
benefits of the Common Securities Guarantee to the extent provided therein. The
Sponsor will provide a copy of the Declaration, the Common Securities Guarantee
and the Indenture to the Holder without charge upon written request to the
Sponsor at its principal place of business.
Upon receipt of this certificate, the Sponsor is bound by the
Declaration and is entitled to the benefits thereunder.
A2-1
<PAGE>
By acceptance, the Holder agrees to treat, for United States
federal income tax purposes, the Trust Debentures as indebtedness and the Common
Securities as evidence of indirect beneficial ownership in the Trust Debentures.
This certificate and the rights of the parties hereunder shall
be governed by and interpreted in accordance with the laws of the State of
Delaware and all rights and remedies shall be governed by such laws without
regard to principles of conflict of laws.
IN WITNESS WHEREOF, the undersigned Regular Trustees of the
Trust have executed this certificate this [ ] day of [ ], [ ].
MDC CAPITAL FUNDING TRUST [ ]
By:
------------------------------
Regular Trustee
By:
------------------------------
Regular Trustee
By:
------------------------------
Regular Trustee
A2-2
<PAGE>
---------------------
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers this Common Security Certificate unto:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Insert assignee's name and social security or tax identification number)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Insert Address and zip code of assignee)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
_______ of the Common Securities represented by this
Certificate and does hereby irrevocably appoint
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
attorney to transfer these Common Securities on the books of the Trust.
The attorney may substitute another to act for him or her.
Date: _______________________
Signature: __________________
(Sign exactly as your name appears on the other side of this Common Security
Certificate)
A2-3
<PAGE>
EXHIBIT B
SPECIMEN OF SUBORDINATED NOTE
B-1
<PAGE>
Exhibit 4.11
================================================================================
CAPITAL SECURITIES GUARANTEE AGREEMENT
M.D.C. HOLDINGS, INC.
Dated as of
Relating to Capital Securities of
MDC CAPITAL FUNDING TRUST [ ]
================================================================================
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C>
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation.......................................................2
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application.....................................................6
SECTION 2.2 Lists of Holders of Securities.......................................................6
SECTION 2.3 Reports by the Capital Securities Guarantee Trustee..................................6
SECTION 2.4 Periodic Reports to Capital Securities Guarantee Trustee.............................7
SECTION 2.5 Evidence of Compliance with Conditions Precedent.....................................7
SECTION 2.6 Events of Default; Waiver............................................................7
SECTION 2.7 Events of Default; Notice............................................................7
SECTION 2.8 Conflicting Interests................................................................8
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
CAPITAL SECURITIES GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Capital Securities Guarantee Trustee........................8
SECTION 3.2 Certain Rights of Capital Securities Guarantee Trustee..............................10
SECTION 3.3 Not Responsible for Recitals or Issuance of Guarantee...............................13
ARTICLE IV
CAPITAL SECURITIES GUARANTEE TRUSTEE
SECTION 4.1 Capital Securities Guarantee Trustee; Eligibility...................................13
SECTION 4.2 Appointment, Removal and Resignation of Capital Securities Guarantee Trustees.......14
</TABLE>
i
<PAGE>
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee...........................................................................15
SECTION 5.2 Waiver of Notice and Demand.........................................................15
SECTION 5.3 Obligations Not Affected............................................................16
SECTION 5.4 Rights of Holders...................................................................17
SECTION 5.5 Guarantee of Payment................................................................17
SECTION 5.6 Subrogation.........................................................................17
SECTION 5.7 Independent Obligations.............................................................18
ARTICLE VI
LIMITATION OF TRANSACTIONS
SECTION 6.1 Limitation of Transactions..........................................................18
ARTICLE VII
TERMINATION
SECTION 7.1 Termination.........................................................................18
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation.........................................................................19
SECTION 8.2 Indemnification.....................................................................19
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns..............................................................21
SECTION 9.2 Amendments..........................................................................21
SECTION 9.3 Notices.............................................................................21
SECTION 9.4 Benefit.............................................................................22
SECTION 9.5 Governing Law.......................................................................22
SECTION 9.6 No Recourse Against Certain Persons.................................................22
</TABLE>
ii
<PAGE>
CAPITAL SECURITIES GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT (the "Capital Securities Guarantee"), dated
as [ ], is executed and delivered by M.D.C. Holdings, Inc., a Delaware
corporation (the "Guarantor"), and , a banking corporation, as
trustee (the "Capital Securities Guarantee Trustee"), for the benefit of the
Holders (as defined herein) from time to time of the Capital Securities (as
defined herein) of MDC Capital Funding Trust [ ], a Delaware statutory
business trust (the "Issuer").
WITNESSETH:
WHEREAS, pursuant to an amended and restated Declaration of Trust
(the "Declaration"), dated as of , [ ], among the trustees of
the Issuer named therein, the Guarantor, as sponsor, and the holders from
time to time of undivided beneficial interests in the assets of the Issuer,
the Issuer is issuing on the date hereof Capital Securities having an
aggregate liquidation amount of $[ ]designated the [ % ] (" " or
the "Capital Securities");
WHEREAS, as incentive for the Holders to purchase the Capital
Securities, the Guarantor desires irrevocably and unconditionally to agree, to
the extent set forth in this Capital Securities Guarantee, to pay to the Holders
of the Capital Securities the Guarantee Payments (as defined herein) and to make
certain other payments on the terms and conditions set forth herein;
WHEREAS, the Guarantor is also executing and delivering a guarantee
agreement (the "Common Securities Guarantee") with substantially identical terms
as this Capital Securities Guarantee for the benefit of the holders of the
Common Securities (as defined herein), except that if an Indenture Event of
Default (as defined herein), has occurred and is continuing, the rights of
holders of the Common Securities to receive Guarantee Payments under the Common
Securities Guarantee are subordinated to the rights of Holders of Capital
Securities to receive Guarantee Payments under this Capital Securities
Guarantee.
NOW, THEREFORE, in consideration of the purchase by each Holder of
Capital Securities, which purchase the Guarantor hereby agrees shall benefit the
Guarantor, the Guarantor executes
<PAGE>
2
and delivers this Capital Securities Guarantee for the benefit of the Holders.
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1. DEFINITIONS AND INTERPRETATION
In this Capital Securities Guarantee, unless the context otherwise
requires:
(a) capitalized terms used in this Capital Securities Guarantee
but not defined in the preamble above have the respective
meanings assigned to them in this Section 1.1;
(b) a term defined anywhere in this Capital Securities Guarantee
has the same meaning throughout;
(c) all references to "the Capital Securities Guarantee" or "this
Capital Securities Guarantee" are to this Capital Securities
Guarantee as modified, supplemented or amended from time to
time;
(d) all references in this Capital Securities Guarantee to
Articles and Sections are to Articles and Sections of this
Capital Securities Guarantee, unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning
when used in this Capital Securities Guarantee, unless
otherwise defined in this Capital Securities Guarantee or
unless the context otherwise requires; and
(f) a reference to the singular includes the plural and vice
versa.
"AFFILIATE" has the same meaning as given to that term in Rule 405 of
the Securities Act of 1933, as amended, or any successor rule thereunder.
"BUSINESS DAY" means any day other than a Saturday, a Sunday or any
other day on which banking institutions in New
<PAGE>
3
York, New York or Denver, Colorado are authorized or required by law to close.
"CAPITAL SECURITIES GUARANTEE TRUSTEE" means , until a
Successor Capital Securities Guarantee Trustee has been appointed and has
accepted such appointment pursuant to the terms of this Capital Securities
Guarantee and thereafter means each such Successor Capital Securities
Guarantee Trustee.
"COMMON SECURITIES" means the securities representing common undivided
beneficial interests in the assets of the Issuer.
"COVERED PERSON" means any Holder or beneficial owner of Capital
Securities.
"EVENT OF DEFAULT" means a default by the Guarantor on any of its
payment or other obligations under this Capital Securities Guarantee after
giving effect to all applicable cure periods.
"GUARANTEE PAYMENTS" means the following payments or distributions,
without duplication, with respect to the Capital Securities, to the extent not
paid or made by the Issuer: (i) any accrued and unpaid Distributions (as defined
in the Declaration) that are required to be paid on such Capital Securities to
the extent the Issuer has funds available therefor, (ii) the redemption price,
including all accrued and unpaid Distributions to the date of redemption (the
"Redemption Price"), to the extent the Issuer has funds available therefor, with
respect to any Capital Securities called for redemption by the Issuer, and (iii)
upon a voluntary or involuntary dissolution, winding-up or termination of the
Issuer (other than in connection with the distribution of Subordinated Notes to
the Holders in exchange for Capital Securities as provided in the Declaration),
the lesser of (a) the aggregate of the liquidation amount and all accrued and
unpaid Distributions on the Capital Securities to the date of payment, to the
extent the Issuer shall have funds available therefor, and (b) the amount of
assets of the Issuer remaining available for distribution to Holders in
liquidation of the Issuer (in either case, the "Liquidation Distribution"). If
an Indenture Event of Default has occurred and is continuing, the rights of
holders of the Common Securities to receive payments under the Common Securities
Guarantee are subordinated to the rights of Holders of Capital Securities to
receive Guarantee Payments.
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4
"HOLDER" shall mean any holder, as registered on the books and records
of the Issuer, of any Capital Securities; PROVIDED, HOWEVER, that, in
determining whether the holders of the requisite percentage of Capital
Securities have given any request, notice, consent or waiver hereunder, "Holder"
shall not include the Guarantor or any Affiliate of the Guarantor.
"INDEMNIFIED PERSON" means the Capital Securities Guarantee Trustee,
any Affiliate of the Capital Securities Guarantee Trustee, or any officers,
directors, shareholders, members, partners, employees, representatives or agents
of the Capital Securities Guarantee Trustee.
"INDENTURE" means the Indenture dated as of , [ ], between
the Guarantor and , as trustee, pursuant to which certain
subordinated debt securities of the Guarantor are to be issued to the
Property Trustee (as defined in the Declaration), as from time to time
amended.
"INDENTURE EVENT OF DEFAULT" has the same meaning as that given to the
term "Event of Default" in the Indenture.
"MAJORITY IN LIQUIDATION AMOUNT OF THE SECURITIES" means, except as
provided by the Trust Indenture Act, a vote by Holder(s) of Capital Securities,
voting separately as a class, of more than 50% of the liquidation amount
(including the stated amount that would be paid on redemption, liquidation or
otherwise, plus accrued and unpaid Distributions to the date upon which the
voting percentages are determined) of all Capital Securities outstanding as of
the date of determination.
"OFFICERS' CERTIFICATE" means, with respect to any Person, a
certificate signed by two Authorized Officers (as defined in the Declaration) of
such Person. Any Officers' Certificate delivered with respect to compliance with
a condition or covenant provided for in this Capital Securities Guarantee shall
include:
(a) a statement that each officer signing the Officers'
Certificate has read the covenant or condition;
(b) a brief statement of the nature and scope of the
examination or investigation undertaken by each officer in rendering
the Officers' Certificate;
(c) a statement that each such officer has made such
examination or investigation as, in such officer's opinion, is
necessary to enable such officer to express an informed
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5
opinion as to whether or not such covenant or condition has been
complied with; and
(d) a statement as to whether, in the opinion of each such
officer, such condition or covenant has been complied with.
"PERSON" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever nature.
"PROPERTY TRUSTEE" shall have the meaning ascribed to such term in the
Declaration.
"RESPONSIBLE OFFICER" means, with respect to the Capital Securities
Guarantee Trustee, (a) any vice president, any assistant vice president, any
secretary or assistant secretary, the treasurer, any assistant treasurer, any
trust officer or assistant trust officer or any other officer of the corporate
trust department of the Capital Securities Guarantee Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of that officer's
knowledge of and familiarity with the particular subject and (b) who shall have
direct responsibility for the administration of this Agreement.
"SUCCESSOR CAPITAL SECURITIES GUARANTEE TRUSTEE" means a successor
Capital Securities Guarantee Trustee possessing the qualifications to act as
Capital Securities Guarantee Trustee under Section 4.1.
"TRUST DEBENTURES" means the series of subordinated debt securities of
the Guarantor designated the [ ] held by the Property Trustee.
"TRUST INDENTURE ACT" means the Trust Indenture Act of 1939, as
amended.
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6
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1. TRUST INDENTURE ACT; APPLICATION
(a) This Capital Securities Guarantee is subject to the provisions of
the Trust Indenture Act that are required to be part of this Capital Securities
Guarantee and shall, to the extent applicable, be governed by such provisions.
(b) If and to the extent that any provision of this Capital Securities
Guarantee limits, qualifies or conflicts with the duties imposed by Section 310
to 317, inclusive, of the Trust Indenture Act, such imposed duties shall
control.
SECTION 2.2. LISTS OF HOLDERS OF SECURITIES
(a) The Guarantor shall provide the Capital Securities Guarantee
Trustee with a list, in such form as the Capital Securities Guarantee Trustee
may reasonably require, of the names and addresses of the Holders of the Capital
Securities ("List of Holders") (i) as of January 1 and June 30 of each year,
within 10 Business Days thereafter, and (ii) at any other time within 30 days of
receipt by the Guarantor of a written request from the Capital Securities
Guarantee Trustee for a List of Holders, which shall be as of a date no more
than 14 days before such List of Holders is given to the Capital Securities
Guarantee Trustee; PROVIDED, HOWEVER, that the Guarantor shall not be obligated
to provide such List of Holders at any time the List of Holders does not differ
from the most recent List of Holders given to the Capital Securities Guarantee
Trustee by the Guarantor. The Capital Securities Guarantee Trustee may destroy
any List of Holders previously given to it on receipt of a new List of Holders.
(b) The Capital Securities Guarantee Trustee shall comply with its
obligations under Section 311(a), 311(b) and Section 312(b) of the Trust
Indenture Act.
SECTION 2.3. REPORTS BY THE CAPITAL SECURITIES GUARANTEE TRUSTEE
Within 60 days after each December 31 of each year, the Capital
Securities Guarantee Trustee shall provide to the Holders of the Capital
Securities such reports as are required by Section 313 of the Trust Indenture
Act, if any, in the form
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7
and in the manner provided by Section 313 of the Trust Indenture Act. The
Capital Securities Guarantee Trustee shall also comply with the requirements of
Section 313(d) of the Trust Indenture Act.
SECTION 2.4. PERIODIC REPORTS TO CAPITAL SECURITIES GUARANTEE TRUSTEE
The Guarantor shall provide to the Capital Securities Guarantee Trustee
such documents, reports and information as required by Section 314 of the Trust
Indenture Act (if any) and the compliance certificate required by Section 314 of
the Trust Indenture Act in the form, in the manner and at the times required by
Section 314 of the Trust Indenture Act.
SECTION 2.5. EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT
The Guarantor shall provide to the Capital Securities Guarantee Trustee
with a certification of compliance with any conditions precedent, if any,
provided for in this Capital Securities Guarantee that relate to any of the
matters set forth in Section 314(c) of the Trust Indenture Act. Any certificate
or opinion required to be given by an officer pursuant to Section 314(c)(1) of
the Trust Indenture Act may be given in the form of an Officers' Certificate.
SECTION 2.6. EVENTS OF DEFAULT; WAIVER
The Holders of a Majority in liquidation amount of Capital Securities
may, by vote, on behalf of the Holders of all of the Capital Securities, waive
any past Event of Default and its consequences. Upon such waiver, any such Event
of Default shall cease to exist, and any Event of Default arising therefrom
shall be deemed to have been cured, for every purpose of this Capital Securities
Guarantee, but no such waiver shall extend to any subsequent or other default or
Event of Default or impair any right consequent thereon.
SECTION 2.7. EVENTS OF DEFAULT; NOTICE
(a) The Capital Securities Guarantee Trustee shall, within 90 days
after the occurrence of an Event of Default that is actually known to the
Capital Securities Guarantee Trustee (or as soon as reasonably practical
thereafter), transmit by mail, first class postage prepaid, to the Holders of
the Capital Securities, notices of all Events of Default actually known to the
Capital Securities Guarantee Trustee, unless such defaults
<PAGE>
8
have been cured before the giving of such notice; PROVIDED, HOWEVER, that the
Capital Securities Guarantee Trustee shall be protected in withholding such
notice if and so long as the board of directors, the executive committee, or a
trust committee of directors and/or Responsible Officers of the Capital
Securities Guarantee Trustee in good faith determines that the withholding of
such notice is in the interests of the Holders of the Capital Securities.
(b) The Capital Securities Guarantee Trustee shall not be deemed to
have knowledge of any Event of Default unless the Capital Securities Guarantee
Trustee shall have received actual knowledge, or a Responsible Officer charged
with the administration of the Declaration shall have obtained written notice,
of such Event of Default.
SECTION 2.8. CONFLICTING INTERESTS
The Declaration shall be deemed to be specifically described in this
Capital Securities Guarantee for the purposes of clause (i) of the first proviso
contained in Section 310(b) of the Trust Indenture Act.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
CAPITAL SECURITIES GUARANTEE TRUSTEE
SECTION 3.1. POWERS AND DUTIES OF THE CAPITAL SECURITIES GUARANTEE TRUSTEE
(a) This Capital Securities Guarantee shall be held by the Capital
Securities Guarantee Trustee for the benefit of the Holders of the Capital
Securities, and the Capital Securities Guarantee Trustee shall not transfer this
Capital Securities Guarantee to any Person except a Holder of Capital Securities
exercising his or her rights pursuant to Section 5.4(b) or to a Successor
Capital Securities Guarantee Trustee on acceptance by such Successor Capital
Securities Guarantee Trustee of its appointment to act as Successor Capital
Securities Guarantee Trustee. The right, title and interest of the Capital
Securities Guarantee Trustee shall automatically vest in any Successor Capital
Securities Guarantee Trustee, and such vesting (and cessation as to the Capital
Securities Guarantee Trustee) of title shall be effective whether or not
conveyancing documents
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9
have been executed and delivered pursuant to the appointment of such Successor
Capital Securities Guarantee Trustee.
(b) If an Event of Default has occurred and is continuing, the Capital
Securities Guarantee Trustee shall enforce this Capital Securities Guarantee for
the benefit of the Holders of the Capital Securities.
(c) The Capital Securities Guarantee Trustee, before the occurrence of
any Event of Default and after the curing of all Events of Default that may have
occurred, shall undertake to perform only such duties as are specifically set
forth in this Capital Securities Guarantee, and no implied covenants shall be
read into this Capital Securities Guarantee against the Capital Securities
Guarantee Trustee. In case an Event of Default has occurred (that has not been
cured or waived pursuant to Section 2.6), the Capital Securities Guarantee
Trustee shall exercise such of the rights and powers vested in it by this
Capital Securities Guarantee, and use the same degree of care and skill in its
exercise thereof, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.
(d) No provision of this Capital Securities Guarantee shall be
construed to relieve the Capital Securities Guarantee Trustee from liability for
its own negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) prior to the occurrence of any Event of Default and after
the curing or waiving of all such Events of Default that may have
occurred:
(A) the duties and obligations of the Capital
Securities Guarantee Trustee shall be determined solely by the
express provisions of this Capital Securities Guarantee, and
the Capital Securities Guarantee Trustee shall not be liable
except for the performance of such duties and obligations as
are specifically set forth in this Capital Securities
Guarantee, and no implied covenants or obligations shall be
read into this Capital Securities Guarantee against the
Capital Securities Guarantee Trustee; and
(B) in the absence of bad faith on the part of the
Capital Securities Guarantee Trustee, the Capital Securities
Guarantee Trustee may conclusively rely, as to the truth of
the statements and the correctness
<PAGE>
10
of the opinions expressed therein, upon any certificates or
opinions furnished to the Capital Securities Guarantee Trustee
and conforming to the requirements of this Capital Securities
Guarantee; but in the case of any such certificates or
opinions that by any provision hereof are specifically
required to be furnished to the Capital Securities Guarantee
Trustee, the Capital Securities Guarantee Trustee shall be
under a duty to examine the same to determine whether or not
they conform to the requirements of this Capital Securities
Guarantee (but need not confirm or investigate the accuracy of
mathematical calculations or other facts stated therein);
(ii) the Capital Securities Guarantee Trustee shall not be
liable for any error of judgment made in good faith by a Responsible
Officer of the Capital Securities Guarantee Trustee, unless it shall be
proved that the Capital Securities Guarantee Trustee was negligent in
ascertaining the pertinent facts upon which such judgment was made;
(iii) the Capital Securities Guarantee Trustee shall not be
liable with respect to any action taken or omitted to be taken by it in
good faith in accordance with the direction of the Holders of not less
than a Majority in liquidation amount of the Capital Securities
relating to the time, method and place of conducting any proceeding for
any remedy available to the Capital Securities Guarantee Trustee, or
exercising any trust or power conferred upon the Capital Securities
Guarantee Trustee under this Capital Securities Guarantee; and
(iv) no provision of this Capital Securities Guarantee shall
require the Capital Securities Guarantee Trustee to expend or risk its
own funds or otherwise incur personal financial liability in the
performance of any of its duties or in the exercise of any of its
rights or powers, if the Capital Securities Guarantee Trustee shall
have reasonable grounds for believing that the repayment of such funds
or liability is not reasonably assured to it under the terms of this
Capital Securities Guarantee or adequate indemnity against such risk or
liability is not reasonably assured to it.
SECTION 3.2. CERTAIN RIGHTS OF CAPITAL SECURITIES GUARANTEE TRUSTEE
(a) Subject to the provisions of Section 3.1:
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11
(i) The Capital Securities Guarantee Trustee may
conclusively rely, and shall be fully protected in acting or
refraining from acting upon, any resolution, certificate,
statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other
evidence of indebtedness or other paper or document believed
by it to be genuine and to have been signed, sent or presented
by the proper party or parties.
(ii) Any direction or act of the Guarantor
contemplated by this Capital Securities Guarantee shall be
sufficiently evidenced by a Direction (as defined in the
Declaration) or an Officers' Certificate.
(iii) Whenever, in the administration of this Capital
Securities Guarantee, the Capital Securities Guarantee Trustee
shall deem it desirable that a matter be proved or established
before taking, suffering or omitting any action hereunder, the
Capital Securities Guarantee Trustee (unless other evidence is
herein specifically prescribed) may, in the absence of bad
faith on its part, request and conclusively rely upon an
Officers' Certificate which, upon receipt of such request,
shall be promptly delivered by the Guarantor.
(iv) The Capital Securities Guarantee Trustee shall
have no duty to see to any recording, filing or registration
of any instrument (or any rerecording, refiling or
reregistration thereof).
(v) The Capital Securities Guarantee Trustee may
consult with counsel of its selection, and the advice or
opinion of such counsel with respect to legal matters shall be
full and complete authorization and protection in respect of
any action taken, suffered or omitted by it hereunder in good
faith and in accordance with such advice or opinion. Such
counsel may be counsel to the Guarantor or any of its
Affiliates and may include any of its employees. The Capital
Securities Guarantee Trustee shall have the right at any time
to seek instructions concerning the administration of this
Capital Securities Guarantee from any court of competent
jurisdiction.
(vi) The Capital Securities Guarantee Trustee shall
be under no obligation to exercise any of the rights or powers
vested in it by this Capital Securities Guarantee at the
request or direction of any Holder, unless such Holder shall
have provided to the Capital Securities Guarantee
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12
Trustee such adequate security and indemnity as would satisfy
a reasonable person in the position of the Capital Securities
Guarantee Trustee, against the costs, expenses (including
attorneys' fees and expenses) and liabilities that might be
incurred by it in complying with such request or direction,
including such reasonable advances as may be requested by the
Capital Securities Guarantee Trustee; PROVIDED, HOWEVER, that
nothing contained in this Section 3.2(a)(vi) shall be taken to
relieve the Capital Securities Guarantee Trustee, upon the
occurrence of an Event of Default, of its obligation to
exercise the rights and powers vested in it by this Capital
Securities Guarantee.
(vii) The Capital Securities Guarantee Trustee shall
not be bound to make any investigation into the facts or
matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Capital
Securities Guarantee Trustee, in its discretion, may make such
further inquiry or investigation into such facts or matters as
it may see fit.
(viii) The Capital Securities Guarantee Trustee may
execute any of the trusts or powers hereunder or perform any
duties hereunder either directly or by or through agents or
attorneys, and the Capital Securities Guarantee Trustee shall
not be responsible for any misconduct or negligence on the
part of any agent or attorney appointed with due care by it
hereunder.
(ix) Any action taken by the Capital Securities
Guarantee Trustee or its agents hereunder shall bind the
Holders of the Capital Securities, and the signature of the
Capital Securities Guarantee Trustee or its agents alone shall
be sufficient and effective to perform any such action. No
third party shall be required to inquire as to the authority
of the Capital Securities Guarantee Trustee to so act or as to
its compliance with any of the terms and provisions of this
Capital Securities Guarantee, both of which shall be
conclusively evidenced by the Capital Securities Guarantee
Trustee's or its agent's taking such action.
(x) Whenever in the administration of this Capital
Securities Guarantee the Capital Securities Guarantee Trustee
shall deem it desirable to receive instructions
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13
with respect to enforcing any remedy or right or taking any
other action hereunder, the Capital Securities Guarantee
Trustee (i) may request instructions from the Holders of a
Majority in liquidation amount of the Capital Securities, (ii)
may refrain from enforcing such remedy or right or taking such
other action until such instructions are received, and (iii)
shall be protected in acting in accordance with such
instructions.
(b) No provision of this Capital Securities Guarantee shall be
deemed to impose any duty or obligation on the Capital Securities
Guarantee Trustee to perform any act or acts or exercise any right,
power, duty or obligation conferred or imposed on it in any
jurisdiction in which it shall be illegal, or in which the Capital
Securities Guarantee Trustee shall be unqualified or incompetent in
accordance with applicable law, to perform any such act or acts or to
exercise any such right, power, duty or obligation. No permissive power
or authority available to the Capital Securities Guarantee Trustee
shall be construed to be a duty.
SECTION 3.3. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF GUARANTEE
The recitals contained in this Capital Securities Guarantee shall be
taken as the statements of the Guarantor, and the Capital Securities Guarantee
Trustee does not assume any responsibility for their correctness. The Capital
Securities Guarantee Trustee makes no representation as to the validity or
sufficiency of this Capital Securities Guarantee.
ARTICLE IV
CAPITAL SECURITIES GUARANTEE TRUSTEE
SECTION 4.1. CAPITAL SECURITIES GUARANTEE TRUSTEE; ELIGIBILITY
(a) There shall at all times be a Capital Securities Guarantee
Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business under the
laws of the United States of America or any State or Territory thereof
or of the District of Columbia,
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14
or a corporation or Person permitted by the Securities and Exchange
Commission to act as an institutional trustee under the Trust Indenture
Act, authorized under such laws to exercise corporate trust powers,
having a combined capital and surplus of at least 50 million U.S.
dollars ($50,000,000), and subject to supervision or examination by
Federal, State, Territorial or District of Columbia authority. If such
corporation publishes reports of condition at least annually, pursuant
to law or to the requirements of the supervising or examining authority
referred to above, then, for the purposes of this Section 4.1(a)(ii),
the combined capital and surplus of such corporation shall be deemed to
be its combined capital and surplus as set forth in its most recent
report of condition so published.
(b) If at any time the Capital Securities Guarantee Trustee
shall cease to be eligible to so act under Section 4.1(a), the Capital
Securities Guarantee Trustee shall immediately resign in the manner and
with the effect set out in Section 4.2(c).
(c) If the Capital Securities Guarantee Trustee has or shall
acquire any "conflicting interest" within the meaning of Section 310(b)
of the Trust Indenture Act, the Capital Securities Guarantee Trustee
and Guarantor shall in all respects comply with the provisions of
Section 310(b) of the Trust Indenture Act.
SECTION 4.2. APPOINTMENT, REMOVAL AND RESIGNATION OF CAPITAL SECURITIES
GUARANTEE TRUSTEES
(a) Subject to Section 4.2(b), the Capital Securities Guarantee Trustee
may be appointed or removed without cause at any time by the Guarantor.
(b) The Capital Securities Guarantee Trustee shall not be removed in
accordance with Section 4.2(a) until a Successor Capital Securities Guarantee
Trustee has been appointed and has accepted such appointment by written
instrument executed by such Successor Capital Securities Guarantee Trustee and
delivered to the Guarantor.
(c) The Capital Securities Guarantee Trustee appointed to office shall
hold office until a Successor Capital Securities Guarantee Trustee shall have
been appointed or until its removal or resignation. The Capital Securities
Guarantee Trustee may resign from office (without need for prior or subsequent
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15
accounting) by an instrument in writing executed by the Capital Securities
Guarantee Trustee and delivered to the Guarantor, which resignation shall not
take effect until a Successor Capital Securities Guarantee Trustee has been
appointed and has accepted such appointment by instrument in writing executed by
such Successor Capital Securities Guarantee Trustee and delivered to the
Guarantor and the resigning Capital Securities Guarantee Trustee.
(d) If no Successor Capital Securities Guarantee Trustee shall have
been appointed and accepted appointment as provided in this Section 4.2 within
30 days after delivery of an instrument of resignation or removal, the Capital
Securities Guarantee Trustee resigning or being removed may (at the expense of
the Guarantor) petition any court of competent jurisdiction for appointment of a
Successor Capital Securities Guarantee Trustee. Such court may thereupon, after
prescribing such notice, if any, as it may deem proper, appoint a Successor
Capital Securities Guarantee Trustee.
ARTICLE V
GUARANTEE
SECTION 5.1. GUARANTEE
The Guarantor irrevocably and unconditionally agrees to pay in full to
the Holders the Guarantee Payments (without duplication of amounts theretofore
paid by the Issuer), as and when due, regardless of any defense, right of
set-off or counterclaim that the Issuer may have or assert. The Guarantor's
obligation to make a Guarantee Payment may be satisfied by direct payment of the
required amounts by the Guarantor to the Holders or by causing the Issuer to pay
such amounts to the Holders.
SECTION 5.2. WAIVER OF NOTICE AND DEMAND
The Guarantor hereby waives notice of acceptance of this Capital
Securities Guarantee and of any liability to which it applies or may apply,
presentment, demand for payment, any right to require a proceeding first against
the Issuer or any other Person before proceeding against the Guarantor, protest,
notice of nonpayment, notice of dishonor, notice of redemption and all other
notices and demands.
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16
SECTION 5.3. OBLIGATIONS NOT AFFECTED
The obligations, covenants, agreements and duties of the Guarantor
under this Capital Securities Guarantee shall in no way be affected or impaired
by reason of the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise,
of the performance or observance by the Issuer of any express or
implied agreement, covenant, term or condition relating to the Capital
Securities to be performed or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all
or any portion of the Distributions, Redemption Price, Liquidation
Distribution or any other sums payable under the terms of the Capital
Securities or the extension of time for the performance of any other
obligation under, arising out of, or in connection with, the Capital
Securities (other than an extension of time for payment of
Distributions or other sum payable that results from the extension of
any interest payment period on the Subordinated Notes permitted by the
Indenture);
(c) any failure, omission, delay or lack of diligence on the
part of the Holders to enforce, assert or exercise any right,
privilege, power or remedy conferred on the Holders pursuant to the
terms of the Capital Securities, or any action on the part of the
Issuer granting indulgence or extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution,
sale of any collateral, receivership, insolvency, bankruptcy,
assignment for the benefit of creditors, reorganization, arrangement,
composition or readjustment of debt of, or other similar proceedings
affecting, the Issuer or any of the assets of the Issuer;
(e) any invalidity of, or defect or deficiency in, the Capital
Securities;
(f) the settlement or compromise of any obligation guaranteed
hereby or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a guarantor;
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17
it being the intent of this Section 5.3 that the obligations of the Guarantor
hereunder shall be absolute and unconditional under any and all circumstances.
There shall be no obligation of the Holders to give notice to, or
obtain consent of, the Guarantor with respect to the happening of any of the
foregoing.
SECTION 5.4. RIGHTS OF HOLDERS
(a) The Holders of a Majority in liquidation amount of the Capital
Securities have the right to direct the time, method and place of conducting of
any proceeding for any remedy available to the Capital Securities Guarantee
Trustee in respect of this Capital Securities Guarantee or exercising any trust
or power conferred upon the Capital Securities Guarantee Trustee under this
Capital Securities Guarantee.
(b) If the Capital Securities Guarantee Trustee fails to enforce this
Capital Securities Guarantee, any Holder of Capital Securities may institute a
legal proceeding directly against the Guarantor to enforce its rights under this
Capital Securities Guarantee, without first instituting a legal proceeding
against the Issuer, the Capital Securities Guarantee Trustee or any other
Person.
(c) Notwithstanding subsection 5.4(b), any Holder of Capital Securities
may directly institute proceedings against the Guarantor to obtain Guarantee
Payments in respect of the Capital Securities owned by such Holder, without
first waiting to determine if the Capital Securities Guarantee Trustee has
enforced this Capital Securities Guarantee or first instituting a legal
proceeding against the Issuer, the Capital Securities Guarantee Trustee or any
other Person.
SECTION 5.5. GUARANTEE OF PAYMENT
This Capital Securities Guarantee creates a guarantee of payment and
not of collection.
SECTION 5.6. SUBROGATION
The Guarantor shall be subrogated to all (if any) rights of the Holders
of Capital Securities against the Issuer in respect of any amounts paid to such
Holders by the Guarantor under this Capital Securities Guarantee; PROVIDED,
HOWEVER, that the Guarantor shall not (except to the extent required by
mandatory provisions of law) be entitled to enforce or exercise
<PAGE>
18
any right that it may acquire by way of subrogation or any indemnity,
reimbursement or other agreement, in all cases as a result of payment under this
Capital Securities Guarantee, if, at the time of any such payment, any amounts
are due and unpaid under this Capital Securities Guarantee. If any amount shall
be paid to the Guarantor in violation of the preceding sentence, the Guarantor
agrees to hold such amount in trust for the Holders and to pay over such amount
to the Holders.
SECTION 5.7. INDEPENDENT OBLIGATIONS
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the Capital
Securities, and that the Guarantor shall be liable as principal and as debtor
hereunder to make Guarantee Payments pursuant to the terms of this Capital
Securities Guarantee notwithstanding the occurrence of any event referred to in
subsections (a) through (g), inclusive, of Section 5.3 hereof.
ARTICLE VI
LIMITATION OF TRANSACTIONS
SECTION 6.1. LIMITATION OF TRANSACTIONS
[RESERVED]
ARTICLE VII
TERMINATION
SECTION 7.1. TERMINATION
This Capital Securities Guarantee shall terminate upon the earliest to
occur of (i) the full payment of the Redemption Price of all Capital Securities,
(ii) the distribution of Trust Debentures to the Holder(s) of all of the Capital
Securities or (iii) full payment of the amounts payable in accordance with the
Declaration upon liquidation of the Issuer. Notwithstanding the foregoing, this
Capital Securities Guarantee will continue to be effective or will be
reinstated, as the case may be, if at any time any Holder of Capital Securities
<PAGE>
19
must restore payment of any sums paid under the Capital Securities or under this
Capital Securities Guarantee.
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1. EXCULPATION
(a) No Indemnified Person shall be liable, responsible or accountable
in damages or otherwise to the Guarantor or any Covered Person for any loss,
damage or claim incurred by reason of any act or omission performed or omitted
by such Indemnified Person in good faith in accordance with this Capital
Securities Guarantee and in a manner that such Indemnified Person reasonably
believed to be within the scope of the authority conferred on such Indemnified
Person by this Capital Securities Guarantee or by law, except that an
Indemnified Person shall be liable for any such loss, damage or claim incurred
by reason of such Indemnified Person's negligence or willful misconduct with
respect to such acts or omission.
(b) An Indemnified Person shall be fully protected in relying in good
faith upon the records of the Guarantor and upon such information, opinions,
reports or statements presented to the Guarantor by any Person as to matters the
Indemnified Person reasonably believes are within such other Person's
professional or expert competence, including information, opinions, reports or
statements as to the value and amount of the assets, liabilities, profits,
losses, or any other facts pertinent to the existence and amount of assets from
which Distributions, the Redemption Price or the Liquidation Distribution to
Holders of Capital Securities might properly be paid.
(c) The provisions of this Section 8.1 shall survive the termination of
this Capital Securities Guarantee.
SECTION 8.2. INDEMNIFICATION
(a) The Guarantor shall indemnify and hold harmless each Indemnified
Person from and against any loss, damage or claim incurred by such Indemnified
Person by reason of any act or omission performed or omitted by such Indemnified
Person in good faith in accordance with this Capital Securities Guarantee and in
a manner such Indemnified Person reasonably believed to be within the scope of
authority conferred on such Indemnified
<PAGE>
20
Person in accordance with this Capital Securities Guarantee, except that no
Indemnified Person shall be entitled to be indemnified in respect of any loss,
damage or claim incurred by such Indemnified Person by reason of negligence or
willful misconduct with respect to such acts or omissions.
(b) Expenses (including legal fees and expenses) incurred by an
Indemnified Person in defending any claim, demand, action, suit or proceeding
(whether such claim, demand, action, suit or proceeding arises between the
parties hereto or results from suits involving third parties) shall, from time
to time, be advanced by the Guarantor prior to the final disposition of such
claim, demand, action, suit or proceeding upon receipt by the Guarantor of an
undertaking by or on behalf of the Indemnified Person to repay such amount if it
shall be determined that the Indemnified Person is not entitled to be
indemnified as authorized in Section 8.2(a).
(c) The Guarantor agrees
(i) to pay to the Capital Securities Guarantee Trustee from
time to time such compensation as the Guarantor and the Capital
Securities Guarantee Trustee shall from time to time agree in writing
for all services rendered by it hereunder (which compensation shall not
be limited by any provision of law in regard to the compensation of a
trustee of an express trust);
(ii) except as otherwise expressly provided herein, to
reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Capital Securities
Guarantee Trustee in accordance with any provision of this Agreement
(including the reasonable compensation and expenses and disbursements
of its agents and counsel).
(d) The provisions of this Section 8.2 shall survive the termination of
this Capital Securities Guarantee.
<PAGE>
21
ARTICLE IX
MISCELLANEOUS
SECTION 9.1. SUCCESSORS AND ASSIGNS
All guarantees and agreements contained in this Capital Securities
Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of the Guarantor and shall inure to the benefit of the Holders
of the Capital Securities then outstanding.
SECTION 9.2. AMENDMENTS
Except with respect to any changes that do not adversely affect the
rights of Holders (in which case no consent of Holders will be required), this
Capital Securities Guarantee may only be amended with the prior approval of the
Holders of at least a Majority in liquidation amount of the Capital Securities.
The provisions of Section 12.2 of the Declaration with respect to meetings of
Holders of the Securities apply to the giving of such approval.
In executing, or accepting the additional trusts created by, and
amendment permitted by this Section or the modification thereby of the trust
created by this Agreement, the Capital Securities Guarantee Trustee shall be
entitled to receive, and shall be fully protected in relying upon, an Opinion of
Counsel stating that the execution of such amendment is authorized or permitted
by this Agreement. The Capital Securities Guarantee Trustee may, but shall not
be obligated to, enter into any such amendment which affects the Trustee's own
rights, duties or immunities under this Agreement or otherwise.
SECTION 9.3. NOTICES
All notices provided for in this Capital Securities Guarantee shall be
in writing, duly signed by the party giving such notice, and shall be delivered,
telecopied or mailed by first class mail, as follows:
(a) If given to the Capital Securities Guarantee Trustee, at the
Capital Securities Guarantee Trustee's mailing address set forth below (or such
other address as the Capital Securities Guarantee Trustee may give notice of to
the Holders of the Capital Securities):
<PAGE>
22
Attention:
(b) If given to the Guarantor, at the Guarantor's mailing address set
forth below (or such other address as the Guarantor may give notice of to the
Holders of the Capital Securities):
M.D.C. Holdings, Inc.
3600 S. Yosemite Street
Suite 900
Denver, Colorado 80237
Attention:
(c) If given to any Holder of Capital Securities, at the address set
forth on the books and records of the Issuer.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid.
SECTION 9.4. BENEFIT
This Capital Securities Guarantee is solely for the benefit of the
Holders of the Capital Securities and, subject to Section 3.1(a), is not
separately transferable from the Capital Securities.
SECTION 9.5. GOVERNING LAW
THIS CAPITAL SECURITIES GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO CONFLICTS OF LAWS PRINCIPLES.
SECTION 9.6. NO RECOURSE AGAINST CERTAIN PERSONS
No past, present or future director, officer, employee or stockholder,
as such, of the Guarantor or any successor thereof shall have any liability for
any obligations of the Guarantor under this Capital Securities Guarantee or for
any claim based on, in respect of, or by reason of, such obligations or their
creation and all such liability is hereby waived and released. Such waiver and
release are part of the consideration for the issue of this Capital Securities
Guarantee and the Capital Securities.
<PAGE>
23
THIS CAPITAL SECURITIES GUARANTEE AGREEMENT is executed as of the day
and year first above written.
M.D.C. HOLDINGS, INC.,
as Guarantor
By:
------------------------------------------
Name:
Title:
[ ],
as Capital Securities Guarantee Trustee
By:
------------------------------------------
Name:
Title:
<PAGE>
Exhibit 4.12
COMMON SECURITIES GUARANTEE AGREEMENT
M.D.C. HOLDINGS, INC.
Dated as of
Relating to Common Securities of
MDC CAPITAL FUNDING TRUST [ ]
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions Interpretation..................................................................2
ARTICLE II
GUARANTEE
SECTION 2.1 Guarantee...................................................................................3
SECTION 2.2 Waiver of Notice and Demand.................................................................4
SECTION 2.3 Obligations Not Affected....................................................................4
SECTION 2.4 Rights of Holders...........................................................................5
SECTION 2.5 Guarantee of Payment........................................................................5
SECTION 2.6 Subrogation.................................................................................5
SECTION 2.7 Independent Obligations.....................................................................5
ARTICLE III
LIMITATION OF TRANSACTIONS
SECTION 3.1 Limitation of Transactions..................................................................6
ARTICLE IV
TERMINATION
SECTION 4.1 Termination.................................................................................6
ARTICLE V
MISCELLANEOUS
SECTION 5.1 Successors and Assigns......................................................................7
SECTION 5.2 Amendments..................................................................................7
SECTION 5.3 Notices.....................................................................................7
SECTION 5.4 Benefit.....................................................................................8
SECTION 5.5 Governing Law...............................................................................8
SECTION 5.6 No Recourse Against Certain Persons.........................................................8
</TABLE>
<PAGE>
COMMON SECURITIES GUARANTEE AGREEMENT
GUARANTEE AGREEMENT (this "Common Securities Guarantee"),
dated as of [ ], is executed and delivered by M.D.C. Holdings, Inc., a
Delaware corporation (the "Guarantor"), for the benefit of the Holders (as
defined herein) from time to time of the Common Securities (as defined herein)
of MDC Capital Funding Trust [ ], a Delaware business trust (the "Issuer").
WHEREAS, pursuant to an amended and restated Declaration of
Trust (the "Declaration"), dated as of [ ], among the Trustees of the
Issuer named therein, the Guarantor, as sponsor, and the holders from time to
time of undivided beneficial interests in the assets of the Issuer, the Issuer
is issuing on the date hereof common securities having an aggregate
liquidation amount of $ designated the Common Securities (the "Common
Securities");
WHEREAS, as incentive for the Holders to purchase the Common
Securities, the Guarantor desires to irrevocably and unconditionally agree, to
the extent set forth in this Common Securities Guarantee, to pay to the Holders
of the Common Securities the Guarantee Payments (as defined herein) and to make
certain other payments on the terms and conditions set forth herein; and
WHEREAS, the Guarantor is also executing and delivering a
guarantee agreement (the "Capital Securities Guarantee") in substantially
identical terms to this Common Securities Guarantee for the benefit of the
holders of the Capital Securities (as defined herein), except that if an Event
of Default (as such term is defined in the Indenture) has occurred and is
continuing, the rights of Holders of the Common Securities to receive Guarantee
Payments under this Common Securities Guarantee are subordinated to the rights
of holders of Capital Securities to receive guarantee payments under the Capital
Securities Guarantee.
NOW, THEREFORE, in consideration of the purchase by each
Holder of Common Securities, which purchase the Guarantor hereby agrees shall
benefit the Guarantor, the Guarantor executes and delivers this Common
Securities Guarantee for the benefit of the Holders.
<PAGE>
-2-
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 DEFINITIONS INTERPRETATION.
In this Common Securities Guarantee, unless the context
otherwise requires:
(a) capitalized terms used in this Common Securities Guarantee
but not defined in the preamble above have the respective meanings
assigned to them in this Section 1.1;
(b) terms defined in the Declaration as at the date of
execution of this Common Securities Guarantee have the same meaning
when used in this Common Securities Guarantee unless otherwise defined
in this Common Securities Guarantee;
(c) a term defined anywhere in this Common Securities
Guarantee has the same meaning throughout;
(d) all references to "the Common Securities Guarantee" or
"this Common Securities Guarantee" are to this Common Securities
Guarantee as modified, supplemented or amended from time to time;
(e) all references in this Common Securities Guarantee to
Articles and Sections are to Articles and Sections of this Common
Securities Guarantee unless otherwise specified; and
(f) a reference to the singular includes the plural and vice
versa.
"Capital Securities" shall mean the securities representing
preferred undivided beneficial interests in the assets of the Issuer.
"Guarantee Payments" shall mean the following payments or
distributions, without duplication, with respect to the Common Securities, to
the extent not paid or made by the Issuer: (i) any accrued and unpaid
Distributions that are required to be paid on such Common Securities, to the
extent the Issuer has funds available therefor, (ii) the redemption price,
including all accrued and unpaid Distributions to the date of redemption (the
"Redemption Price"), to the extent the Issuer has funds available therefor, with
respect to any Common Securities called for redemption by the Issuer, and (iii)
upon a voluntary or involuntary dissolution, winding-up or termination of the
Issuer (other than in connection with the distribution of Trust Debentures to
the Holders in exchange for Common Securities
<PAGE>
-3-
as provided in the Declaration), the lesser of (a) the aggregate of the
liquidation amount and all accrued and unpaid Distributions on the Common
Securities to the date of payment, to the extent the Issuer has funds available
therefor, and (b) the amount of assets of the Issuer remaining available for
distribution to Holders in liquidation of the Issuer (in either case, the
"Liquidation Distribution"). If an Event of Default (as defined in the
Indenture) has occurred and is continuing, the rights of Holders of the Common
Securities to receive Guarantee Payments under this Common Securities Guarantee
are subordinated to the rights of holders of Capital Securities to receive
guarantee payments under the Capital Securities Guarantee.
"Holder" shall mean any holder, as registered on the books and
records of the Issuer, of any Common Securities.
"Indenture" means the Indenture dated as of [ ],
between the Guarantor and [ ], as Trustee, and the First Supplemental
Indenture thereto pursuant to which certain subordinated debt securities of the
Guarantor are to be issued to the Property Trustee (as defined in the
Declaration), as from time to time amended.
"Property Trustee" shall have the meaning ascribed to such
term in the Declaration.
"Trust Debentures" means the series of subordinated debt
securities of the Guarantor designated the [ ], held by the Property
Trustee.
ARTICLE II
GUARANTEE
SECTION 2.1 GUARANTEE
The Guarantor irrevocably and unconditionally agrees to pay in
full to the Holders the Guarantee Payments (without duplication of amounts
theretofore paid by the Issuer), as and when due, regardless of any defense,
right of set-off or counterclaim which the Issuer may have or assert. The
Guarantor's obligation to make a Guarantee Payment may be satisfied by direct
payment of the required amounts by the Guarantor to the Holders or by causing
the Issuer to pay such amounts to the Holders.
<PAGE>
-4-
SECTION 2.2 WAIVER OF NOTICE AND DEMAND
The Guarantor hereby waives notice of acceptance of this
Common Securities Guarantee and of any liability to which it applies or may
apply, presentment, demand for payment, any right to require a proceeding first
against the Issuer or any other Person before proceeding against the Guarantor,
protest, notice of nonpayment, notice of dishonor, notice of redemption and all
other notices and demands.
SECTION 2.3 OBLIGATIONS NOT AFFECTED
The obligations, covenants, agreements and duties of the
Guarantor under this Common Securities Guarantee shall in no way be affected or
impaired by reason of the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise,
of the performance or observance by the Issuer of any express or
implied agreement, covenant, term or condition relating to the Common
Securities to be performed or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all
or any portion of the Distributions, Redemption Price, Liquidation
Distribution or any other sums payable under the terms of the Common
Securities or the extension of time for the performance of any other
obligation under, arising out of, or in connection with, the Common
Securities (other than an extension of time for payment of
Distributions or other sum payable that results from the extension of
any interest payment period on the Trust Debentures permitted by the
Indenture);
(c) any failure, omission, delay or lack of diligence on the
part of the Holders to enforce, assert or exercise any right,
privilege, power or remedy conferred on the Holders pursuant to the
terms of the Common Securities, or any action on the part of the Issuer
granting indulgence or extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution,
sale of any collateral, receivership, insolvency, bankruptcy,
assignment for the benefit of creditors, reorganization, arrangement,
composition or readjustment of debt of, or other similar proceedings
affecting, the Issuer or any of the assets of the Issuer;
(e) any invalidity of, or defect or deficiency in, the Common
Securities;
(f) the settlement or compromise of any obligation guaranteed
hereby or hereby incurred; or
<PAGE>
-5-
(g) any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a guarantor;
it being the intent of this Section 2.3 that the obligations of the Guarantor
hereunder shall be absolute and unconditional under any and all circumstances.
There shall be no obligation of the Holders to give notice to,
or obtain consent of, the Guarantor with respect to the happening of any of the
foregoing.
SECTION 2.4 RIGHTS OF HOLDERS
The Guarantor expressly acknowledges that any Holder of Common
Securities may institute a legal proceeding directly against the Guarantor to
enforce its rights under this Common Securities Guarantee, without first
instituting a legal proceeding against the Issuer or any other Person.
SECTION 2.5 GUARANTEE OF PAYMENT
This Common Securities Guarantee creates a guarantee of
payment and not of collection.
SECTION 2.6 SUBROGATION
The Guarantor shall be subrogated to all (if any) rights of
the Holders of Common Securities against the Issuer in respect of any amounts
paid to such Holders by the Guarantor under this Common Securities Guarantee;
PROVIDED, HOWEVER, that the Guarantor shall not (except to the extent required
by mandatory provisions of law) be entitled to enforce or exercise any rights
which it may acquire by way of subrogation or any indemnity, reimbursement or
other agreement, in all cases as a result of payment under this Common
Securities Guarantee, if, at the time of any such payment, any amounts are due
and unpaid under this Common Securities Guarantee. If any amount shall be paid
to the Guarantor in violation of the preceding sentence, the Guarantor agrees to
hold such amount in trust for the Holders and to pay over such amount to the
Holders.
SECTION 2.7 INDEPENDENT OBLIGATIONS
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the Common
Securities and that the Guarantor shall be liable as principal and as debtor
hereunder to make Guarantee Payments pursuant to the terms of this Common
Securities Guarantee notwithstanding the occurrence of any event referred to in
subsections (a) through (g), inclusive, of Section 2.3 hereof.
<PAGE>
-6-
ARTICLE III
LIMITATION OF TRANSACTIONS
SECTION 3.1 LIMITATION OF TRANSACTIONS
(a) So long as any Common Securities remain outstanding, if
(i) the Guarantor shall be in default with respect to its Guarantee Payments or
other obligations hereunder, or (ii) if an Event of Default (as defined in the
Indenture) shall exist then (a) the Guarantor shall not declare or pay any
dividend on, or make any distributions with respect to, or redeem, purchase,
acquire or make a liquidation payment with respect to, any of its capital stock,
or make any guarantee payments with respect to any of the foregoing, and (b) the
Guarantor shall not make any payment of interest, principal or premium, if any,
on or repay, repurchase or redeem any debt securities issued by the Guarantor
(including any guarantees) which rank pari passu with or junior to the Trust
Debentures.
(b) Notwithstanding subsection 3.1(a) or any other language to
the contrary contained in this Common Securities Guarantee, nothing shall
prevent the Guarantor from: (i) declaring or paying any dividend on, or making
any distribution with respect to, or redeeming, purchasing, acquiring or making
a liquidation payment with respect to, any of its capital stock in or with (x)
securities of the Guarantor (including capital stock) that rank junior to such
capital stock or (y) securities (including capital stock) of the Guarantor or
(ii) paying any interest, principal or premium on, or repaying, repurchasing or
redeeming, any debt securities issued by the Guarantor that rank pari passu with
or junior to the Trust Debentures, with securities of the Guarantor (including
capital stock) that rank junior to such debt securities.
ARTICLE IV
TERMINATION
SECTION 4.1 TERMINATION
This Common Securities Guarantee shall terminate upon the
first to occur of (i) full payment of the Redemption Price of all Common
Securities, (ii) the distribution of Trust Debentures to the Holders of all of
the Common Securities or (iii) the full payment of the amounts payable in
accordance with the Declaration upon liquidation of the Issuer. Notwithstanding
the foregoing, this Common Securities Guarantee will continue to be effective or
will be reinstated, as the case may be, if at any time any Holder of Common
Securities
<PAGE>
must restore payment of any sums paid under the Common Securities or
under this Common Securities Guarantee.
ARTICLE V
MISCELLANEOUS
SECTION 5.1 SUCCESSORS AND ASSIGNS
All guarantees and agreements contained in this Common
Securities Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of the Guarantor and shall inure to the benefit of the Holders
of the Common Securities then outstanding.
SECTION 5.2 AMENDMENTS
Except with respect to any changes which do not adversely
affect the rights of Holders (in which case no consent of Holders will be
required), this Common Securities Guarantee may only be amended with the prior
approval of the Holders of at least a majority in liquidation amount of all the
outstanding Common Securities. The provisions of Section 12.2 of the Declaration
with respect to meetings of Holders of the Securities apply to the giving of
such approval.
SECTION 5.3 NOTICES
All notices provided for in this Common Securities Guarantee
shall be in writing, duly signed by the party giving such notice, and shall be
delivered, telecopied or mailed by registered or certified mail, as follows:
(a) if given to the Issuer, in care of the Regular Trustees at
the Issuer's mailing address set forth below (or such other address as
the Issuer may give notice of to the Holders of the Common Securities):
MDC Capital Funding Trust [ ]
c/o M.D.C. Holdings, Inc.
3600 S. Yosemite Street
Suite 900
Denver, Colorado 80237
Attention:
<PAGE>
-8-
(b) if given to the Guarantor, at the Guarantor's mailing
address set forth below (or such other address as the Guarantor may
give notice of to the Holders of the Common Securities):
M.D.C. Holdings, Inc.
3600 S. Yosemite Street
Suite 900
Denver, Colorado 80237
Attention:
(c) if given to any Holder of Common Securities, at the
address set forth on the books and records of the Issuer.
All such notices shall be deemed to have been given when
received in person, telecopied with receipt confirmed, or mailed by first class
mail, postage prepaid except that if a notice or other document is refused
delivery or cannot be delivered because of a changed address of which no notice
was given, such notice or other document shall be deemed to have been delivered
on the date of such refusal or inability to deliver.
SECTION 5.4 BENEFIT
This Common Securities Guarantee is solely for the benefit of
the Holders of the Common Securities and is not separately transferable from the
Common Securities.
SECTION 5.5 GOVERNING LAW
THIS COMMON SECURITIES GUARANTEE SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK,
WITHOUT GIVING EFFECT TO CONFLICTS OF LAWS PRINCIPLES.
SECTION 5.6 NO RECOURSE AGAINST CERTAIN PERSONS
No past, present or future director, officer, employee or
stockholder, as such, of the Guarantor or any successor thereof shall have any
liability for any obligations of the Guarantor under this Capital Securities
Guarantee or for any claim based on, in respect of, or by reason of, such
obligations or their creation and all such liability is hereby waived and
released. Such waiver and release are part of the consideration for the issue of
this Common Securities Guarantee and the Common Securities.
<PAGE>
-9-
THIS COMMON SECURITIES GUARANTEE SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK,
WITHOUT GIVING EFFECT TO CONFLICTS OF
This Common Securities Guarantee is executed as of the day and
year first above written.
M.D.C. HOLDINGS, INC.
By:
----------------------------------
Name:
Title:
<PAGE>
Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the prospectus
constituting part of this Registration Statement on Form S-3 of our report dated
February 5, 1998 appearing on page F-2 of M.D.C. Holdings, Inc.'s Annual Report
on Form 10-K for the year ended December 31, 1997. We also consent to the
reference to us under the heading "Experts" in such prospectus.
PricewaterhouseCoopers LLP
Denver, Colorado
January 8, 1999
<PAGE>
Exhibit 25.1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A TRUSTEE PURSUANT TO SECTION 305(b)(2)
------------------
THE FIRST NATIONAL BANK OF CHICAGO
(EXACT NAME OF TRUSTEE AS SPECIFIED IN ITS CHARTER)
A NATIONAL BANKING ASSOCIATION 36-0899825
(I.R.S. EMPLOYER
IDENTIFICATION NUMBER)
ONE FIRST NATIONAL PLAZA, CHICAGO, ILLINOIS 60670-0126
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
THE FIRST NATIONAL BANK OF CHICAGO
ONE FIRST NATIONAL PLAZA, SUITE 0286
CHICAGO, ILLINOIS 60670-0286
ATTN: LYNN A. GOLDSTEIN, LAW DEPARTMENT (312) 732-6919
(NAME, ADDRESS AND TELEPHONE NUMBER OF AGENT FOR SERVICE)
------------------
MDC CAPITAL FUNDING TRUST I
(EXACT NAME OF OBLIGORS AS SPECIFIED IN THEIR TRUST AGREEMENTS)
DELAWARE TO BE APPLIED FOR
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
3600 SOUTH YOSEMITE STREET
SUITE 900
DENVER, COLORADO 80237
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
TRUST CAPITAL SECURITIES OF MDC CAPITAL FUNDING TRUST I
(TITLE OF INDENTURE SECURITIES)
<PAGE>
ITEM 1. GENERAL INFORMATION. FURNISH THE FOLLOWING
INFORMATION AS TO THE TRUSTEE:
(A) NAME AND ADDRESS OF EACH EXAMINING OR
SUPERVISING AUTHORITY TO WHICH IT IS SUBJECT.
Comptroller of Currency, Washington, D.C.; Federal Deposit
Insurance Corporation, Washington, D.C.; The Board of
Governors of the Federal Reserve System, Washington D.C..
(B) WHETHER IT IS AUTHORIZED TO EXERCISE
CORPORATE TRUST POWERS.
The trustee is authorized to exercise corporate trust powers.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR. IF THE OBLIGOR
IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH
SUCH AFFILIATION.
No such affiliation exists with the trustee.
ITEM 16. LIST OF EXHIBITS. LIST BELOW ALL EXHIBITS FILED AS A PART
OF THIS STATEMENT OF ELIGIBILITY.
1. A copy of the articles of association of the
trustee now in effect.*
2. A copy of the certificates of authority of the trustee to
commence business.*
3. A copy of the authorization of the trustee to exercise
corporate trust powers.*
4. A copy of the existing by-laws of the trustee.*
5. Not Applicable.
6. The consent of the trustee required by Section 321(b) of
the Act.
<PAGE>
7. A copy of the latest report of condition of the trustee
published pursuant to law or the requirements of its
supervising or examining authority.
8. Not Applicable.
9. Not Applicable.
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, The First National Bank of Chicago, a national
banking association organized and existing under the laws of the United
States of America, has duly caused this Statement of Eligibility to be
signed on its behalf by the undersigned, thereunto duly authorized, all
in the City of Chicago and State of Illinois, on the 7th day of
January, 1999.
THE FIRST NATIONAL BANK OF CHICAGO,
TRUSTEE
BY
-----------------------------------------------
STEVEN M. WAGNER
FIRST VICE PRESIDENT
* EXHIBIT 1, 2, 3 AND 4 ARE HEREIN INCORPORATED BY REFERENCE TO EXHIBITS BEARING
IDENTICAL NUMBERS IN ITEM 16 OF THE FORM T-1 OF THE FIRST NATIONAL BANK OF
CHICAGO, FILED AS EXHIBIT 25 TO THE REGISTRATION STATEMENT ON FORM S-3 OF U S
WEST CAPITAL FUNDING, INC., FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON
MAY 6, 1998 (REGISTRATION NO. 333-51907-01).
<PAGE>
EXHIBIT 6
THE CONSENT OF THE TRUSTEE REQUIRED
BY SECTION 321(b) OF THE ACT
January 7, 1999
Securities and Exchange Commission
Washington, D.C. 20549
Gentlemen:
In connection with the qualification of the Amended and Restated Declaration of
Trust of MDC Capital Funding Trust I, the undersigned, in accordance with
Section 321(b) of the Trust Indenture Act of 1939, as amended, hereby consents
that the reports of examinations of the undersigned, made by Federal or State
authorities authorized to make such examinations, may be furnished by such
authorities to the Securities and Exchange Commission upon its request therefor.
Very truly yours,
THE FIRST NATIONAL BANK OF CHICAGO
BY:
------------------------------------------------
STEVEN M. WAGNER
FIRST VICE PRESIDENT
<PAGE>
EXHIBIT 7
Legal Title of Bank: The First National Bank of Chicago Call Date: 09/30/98
ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0460 Page RC-1
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
CONSOLIDATED REPORT OF CONDITION FOR INSURED COMMERCIAL
AND STATE-CHARTERED SAVINGS BANKS FOR SEPTEMBER 30, 1998
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding of the last business day of the
quarter.
SCHEDULE RC--BALANCE SHEET
<TABLE>
<CAPTION>
DOLLAR AMOUNTS IN THOUSANDS
RCFD BIL MIL THOU C400
------- ------------- -----
<S> <C> <C> <C>
ASSETS
1. Cash and balances due from depository institutions (from Schedule
RC-A): RCFD
a. Noninterest-bearing balances and currency and coin(1) ............................ 0081 4,898,646 1.a
b. Interest-bearing balances(2)...................................................... 0071 4,612,143 1.b
2. Securities
a. Held-to-maturity securities(from Schedule RC-B, column A) 1754 0 2.a
b. Available-for-sale securities (from Schedule RC-B, column D)...................... 1773 9,817,318 2.b
3. Federal funds sold and securities purchased under agreements to
resell .............................................................................. 1350 6,071,229 3.
4. Loans and lease financing receivables:
a. Loans and leases, net of unearned income (from Schedule RCFD
RC-C)............................................ ................................... 2122 26,327,215 4.a
b. LESS: Allowance for loan and lease losses..... ................................... 3123 412,850 4.b
c. LESS: Allocated transfer risk reserve......... ................................... 3128 0 4.c
d. Loans and leases, net of unearned income, allowance, and RCFD
reserve (item 4.a minus 4.b and 4.c).......... ................................... 2125 25,914,365 4.d
5. Trading assets (from Schedule RD-D).................................................. 3545 6,924,064 5.
6. Premises and fixed assets (including capitalized leases) ............................ 2145 731,747 6.
7. Other real estate owned (from Schedule RC-M) ........................................ 2150 6,424 7.
8. Investments in unconsolidated subsidiaries and associated
companies (from Schedule RC-M)................... ................................... 2130 153,385 8.
9. Customers' liability to this bank on acceptances outstanding ........................ 2155 352,324 9.
10. Intangible assets (from Schedule RC-M)...... ........................................ 2143 295,823 10.
11. Other assets (from Schedule RC-F)........... ........................................ 2160 2,193,803 11.
12. Total assets (sum of items 1 through 11).... ........................................ 2170 61,971,271 12.
</TABLE>
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
<PAGE>
Legal Title of Bank: The First National Bank of Chicago Call Date: 09/30/98
ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0460 Page RC-2
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
SCHEDULE RC-CONTINUED
<TABLE>
<CAPTION>
DOLLAR AMOUNTS IN
THOUSANDS
---------
<S> <C> <C> <C>
LIABILITIES
13. Deposits:
a. In domestic offices (sum of totals of columns A and C RCON
from Schedule RC-E, part 1)....................................................... 2200 20,965,124 13.a
(1) Noninterest-bearing(1)........................................................ 6631 9,191,662 13.a1
(2) Interest-bearing.............................................................. 6636 11,773,462 13.a2
b. In foreign offices, Edge and Agreement subsidiaries, and ......................... RCFN
IBFs (from Schedule RC-E, part II)... ............................................ 2200 15,912,956 13.b
(1) Noninterest bearing........................................................... 6631 475,182 13.b1
(2) Interest-bearing.............................................................. 6636 15,437,774 13.b2
14. Federal funds purchased and securities sold under agreements
to repurchase: ...................................................................... RCFD 2800 4,245,925 14
15. a. Demand notes issued to the U.S. Treasury ......................................... RCON 2840 359,381 15.a
b. Trading Liabilities(from Sechedule RC-D).......................................... RCFD 3548 5,614,049 15.b
16. Other borrowed money: ............................................................... RCFD
a. With original maturity of one year or less........................................ 2332 4,603,402 16.a
b. With original maturity of more than one year..................................... A547 328,001 16.b
c.With original maturity of more than three years.................................... A548 324,984 16.c
17. Not applicable
18. Bank's liability on acceptance executed and outstanding ............................. 2920 352,324 18.
19. Subordinated notes and debentures.................................................... 3200 2,400,000 19.
20. Other liabilities (from Schedule RC-G)............................................... 2930 1,833,935 20.
21. Total liabilities (sum of items 13 through 20)....................................... 2948 56,940,081 21.
22. Not applicable
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus........................................ 3838 0 23.
24. Common stock......................................................................... 3230 200,858 24.
25. Surplus (exclude all surplus related to preferred stock) ............................ 3839 3,192,857 25.
26. a. Undivided profits and capital reserves............................................ 3632 1,614,511 26.a
b. Net unrealized holding gains (losses) on available-for-sale
securities........................................................................ 8434 27,815 26.b
27. Cumulative foreign currency translation adjustments.................................. 3284 (4,851) 27.
28. Total equity capital (sum of items 23 through 27) ................................... 3210 5,031,190 28.
29. Total liabilities, limited-life preferred stock, and equity
capital (sum of items 21, 22, and 28)................................................ 3300 61,971,271 29.
</TABLE>
Memorandum
To be reported only with the March Report of Condition.
<TABLE>
<CAPTION>
<S> <C>
1. Indicate in the box at the right the number of the statement below that best
describes the most comprehensive level of auditing work performed for the bank Number
by independent external Number auditors as of any date during 1996 ................... RCFD 6724 N/A M.1.
1 = Independent audit of the bank conducted in accordance 4. = Directors' examination of the bank performed by other
with generally accepted auditing standards by a certified external auditors (may be required by state
public accounting firm which submits a report on the bank chartering authority)
2 = Independent audit of the bank's parent holding company 5 = Review of the bank's financial statements by
conducted in accordance with generally accepted auditing external auditors
standards by a certified public accounting firm which 6 = Compilation of the bank's financial statements by
submits a report on the consolidated holding company external auditors
(but not on the bank separately) 7 = Other audit procedures (excluding tax preparation
3 = Directors' examination of the bank conducted in work)
accordance with generally accepted auditing standards 8 = No external audit work
by a certified public accounting firm (may be required by
state chartering authority)
</TABLE>
- ---------------
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
<PAGE>
Exhibit 25.2
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A TRUSTEE PURSUANT TO SECTION 305(B)(2)___
----------
THE FIRST NATIONAL BANK OF CHICAGO
(EXACT NAME OF TRUSTEE AS SPECIFIED IN ITS CHARTER)
A NATIONAL BANKING ASSOCIATION 36-0899825
(I.R.S. EMPLOYER
IDENTIFICATION NUMBER)
ONE FIRST NATIONAL PLAZA, CHICAGO, ILLINOIS 60670-0126
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
THE FIRST NATIONAL BANK OF CHICAGO
ONE FIRST NATIONAL PLAZA, SUITE 0286
CHICAGO, ILLINOIS 60670-0286
ATTN: LYNN A. GOLDSTEIN, LAW DEPARTMENT (312) 732-6919
(NAME, ADDRESS AND TELEPHONE NUMBER OF AGENT FOR SERVICE)
----------
MDC CAPITAL FUNDING TRUST II
(EXACT NAME OF OBLIGORS AS SPECIFIED IN THEIR TRUST AGREEMENTS)
DELAWARE TO BE APPLIED FOR
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
3600 SOUTH YOSEMITE STREET
SUITE 900
DENVER, COLORADO 80237
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
TRUST CAPITAL SECURITIES OF MDC CAPITAL FUNDING TRUST II
(TITLE OF INDENTURE SECURITIES)
<PAGE>
ITEM 1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE
TRUSTEE:
(A) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO
WHICH IT IS SUBJECT.
Comptroller of Currency, Washington, D.C.; Federal Deposit Insurance
Corporation, Washington, D.C.; The Board of Governors of the Federal
Reserve System, Washington D.C..
(B) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
The trustee is authorized to exercise corporate trust powers.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR. IF THE OBLIGOR IS AN AFFILIATE OF THE
TRUSTEE, DESCRIBE EACH SUCH AFFILIATION.
No such affiliation exists with the trustee.
ITEM 16. LIST OF EXHIBITS. LIST BELOW ALL EXHIBITS FILED AS A PART OF THIS
STATEMENT OF ELIGIBILITY.
1. A copy of the articles of association of the trustee now in
effect.*
2. A copy of the certificates of authority of the trustee to
commence business.*
3. A copy of the authorization of the trustee to exercise
corporate trust powers.*
4. A copy of the existing by-laws of the trustee.*
5. Not Applicable.
6. The consent of the trustee required by Section 321(b) of the
Act.
<PAGE>
7. A copy of the latest report of condition of the trustee
published pursuant to law or the requirements of its
supervising or examining authority.
8. Not Applicable.
9. Not Applicable.
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, The First National Bank of Chicago, a national
banking association organized and existing under the laws of the United
States of America, has duly caused this Statement of Eligibility to be
signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of Chicago and State of Illinois, on the 7th day of January, 1999.
THE FIRST NATIONAL BANK OF CHICAGO,
TRUSTEE
BY
----------------------------------
STEVEN M. WAGNER
FIRST VICE PRESIDENT
* EXHIBIT 1, 2, 3 AND 4 ARE HEREIN INCORPORATED BY REFERENCE TO EXHIBITS BEARING
IDENTICAL NUMBERS IN ITEM 16 OF THE FORM T-1 OF THE FIRST NATIONAL BANK OF
CHICAGO, FILED AS EXHIBIT 25 TO THE REGISTRATION STATEMENT ON FORM S-3 OF U S
WEST CAPITAL FUNDING, INC., FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON
MAY 6, 1998 (REGISTRATION NO. 333-51907-01).
<PAGE>
EXHIBIT 6
THE CONSENT OF THE TRUSTEE REQUIRED
BY SECTION 321(b) OF THE ACT
January 7, 1999
Securities and Exchange Commission
Washington, D.C. 20549
Gentlemen:
In connection with the qualification of the Amended and Restated Declaration of
Trust of MDC Capital Funding Trust II, the undersigned, in accordance with
Section 321(b) of the Trust Indenture Act of 1939, as amended, hereby consents
that the reports of examinations of the undersigned, made by Federal or State
authorities authorized to make such examinations, may be furnished by such
authorities to the Securities and Exchange Commission upon its request therefor.
Very truly yours,
THE FIRST NATIONAL BANK OF CHICAGO
BY:
------------------------------------
STEVEN M. WAGNER
FIRST VICE PRESIDENT
<PAGE>
EXHIBIT 7
Legal Title of Bank: The First National Bank of Chicago Call Date: 09/30/98
ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0460 Page RC-1
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
CONSOLIDATED REPORT OF CONDITION FOR INSURED COMMERCIAL
AND STATE-CHARTERED SAVINGS BANKS FOR SEPTEMBER 30, 1998
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding of the last business day of the
quarter.
SCHEDULE RC--BALANCE SHEET
<TABLE>
<CAPTION>
DOLLAR AMOUNTS IN THOUSANDS C400
----
RCFD BIL MIL THOU
---- ------------
<S> <C> <C> <C>
ASSETS
1. Cash and balances due from depository institutions (from Schedule
RC-A): RCFD
a. Noninterest-bearing balances and currency and coin(1) .................. 0081 4,898,646 1.a
b. Interest-bearing balances(2) ........................................... 0071 4,612,143 1.b
2. Securities
a. Held-to-maturity securities(from Schedule RC-B, column A) .............. 1754 0 2.a
b. Available-for-sale securities (from Schedule RC-B, column D) ........... 1773 9,817,318 2.b
3. Federal funds sold and securities purchased under agreements to
resell .................................................................... 1350 6,071,229 3.
4. Loans and lease financing receivables:
a. Loans and leases, net of unearned income (from Schedule RCFD
RC-C) ..................................................................... 2122 26,327,215 4.a
b. LESS: Allowance for loan and lease losses .............................. 3123 412,850 4.b
c. LESS: Allocated transfer risk reserve .................................. 3128 0 4.c
d. Loans and leases, net of unearned income, allowance, and RCFD
reserve (item 4.a minus 4.b and 4.c) ................................... 2125 25,914,365 4.d
5. Trading assets (from Schedule RD-D) ....................................... 3545 6,924,064 5.
6. Premises and fixed assets (including capitalized leases) .................. 2145 731,747 6.
7. Other real estate owned (from Schedule RC-M) .............................. 2150 6,424 7.
8. Investments in unconsolidated subsidiaries and associated
companies (from Schedule RC-M) ............................................ 2130 153,385 8.
9. Customers' liability to this bank on acceptances outstanding .............. 2155 352,324 9.
10. Intangible assets (from Schedule RC-M) .................................... 2143 295,823 10.
11. Other assets (from Schedule RC-F) ......................................... 2160 2,193,803 11.
12. Total assets (sum of items 1 through 11) .................................. 2170 61,971,271 12.
</TABLE>
- ----------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
<PAGE>
Legal Title of Bank: The First National Bank of Chicago Call Date: 09/30/98
ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0460 Page RC-2
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
SCHEDULE RC-CONTINUED
<TABLE>
<CAPTION>
DOLLAR AMOUNTS IN
THOUSANDS
---------
<S> <C> <C> <C>
LIABILITIES
13. Deposits:
a. In domestic offices (sum of totals of columns A and C RCON
from Schedule RC-E, part 1) ............................................ 2200 20,965,124 13.a
(1) Noninterest-bearing(1) ............................................. 6631 9,191,662 13.a1
(2) Interest-bearing ................................................... 6636 11,773,462 13.a2
b. In foreign offices, Edge and Agreement subsidiaries, and RCFN
IBFs (from Schedule RC-E, part II) ..................................... 2200 15,912,956 13.b
(1) Noninterest bearing ................................................ 6631 475,182 13.b1
(2) Interest-bearing ................................................... 6636 15,437,774 13.b2
14. Federal funds purchased and securities sold under agreements
to repurchase: ............................................................ RCFD 2800 4,245,925 14
15. a. Demand notes issued to the U.S. Treasury ............................... RCON 2840 359,381 15.a
b. Trading Liabilities(from Sechedule RC-D) ............................... RCFD 3548 5,614,049 15.b
16. Other borrowed money: RCFD
a. With original maturity of one year or less ............................. 2332 4,603,402 16.a
b. With original maturity of more than one year .......................... A547 328,001 16.b
c.With original maturity of more than three years ......................... A548 324,984 16.c
17. Not applicable
18. Bank's liability on acceptance executed and outstanding ................... 2920 352,324 18.
19. Subordinated notes and debentures ......................................... 3200 2,400,000 19.
20. Other liabilities (from Schedule RC-G) .................................... 2930 1,833,935 20.
21. Total liabilities (sum of items 13 through 20) ............................ 2948 56,940,081 21.
22. Not applicable
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus ............................. 3838 0 23.
24. Common stock .............................................................. 3230 200,858 24.
25. Surplus (exclude all surplus related to preferred stock) .................. 3839 3,192,857 25.
26. a. Undivided profits and capital reserves ................................. 3632 1,614,511 26.a
b. Net unrealized holding gains (losses) on available-for-sale
securities ............................................................. 8434 27,815 26.b
27. Cumulative foreign currency translation adjustments ....................... 3284 (4,851) 27.
28. Total equity capital (sum of items 23 through 27) ......................... 3210 5,031,190 28.
29. Total liabilities, limited-life preferred stock, and equity
capital (sum of items 21, 22, and 28) ..................................... 3300 61,971,271 29.
</TABLE>
Memorandum
To be reported only with the March Report of Condition.
<TABLE>
<S> <C> <C> <C>
1. Indicate in the box at the right the number of the statement below that best
describes the most comprehensive level of auditing work performed for the Number
bank by independent external auditors as of any date during 1996 .......... RCFD 6724 / N/A / M.1.
</TABLE>
1 = Independent audit of the bank conducted in accordance performed by other
with generally accepted auditing standards by a certified required by state
chartering public accounting firm which submits a report on the bank
2 = Independent audit of the bank's parent holding company statements by
external conducted in accordance with generally accepted auditing standards
by a certified public accounting firm which financial statements by
external submits a report on the consolidated holding company (but not on
the bank separately) tax preparation work)
3 = Directors' examination of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm (may be
required by state chartering authority)
4.= Directors' examination of the bank external auditors (may be authority)
5 = Review of the bank's financial auditors
6 = Compilation of the bank's auditors
7 = Other audit procedures (excluding
8 = No external audit work
- ----------
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
<PAGE>
Exhibit 25.3
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A TRUSTEE PURSUANT TO SECTION 305(b)(2)___
--------------------
THE FIRST NATIONAL BANK OF CHICAGO
(EXACT NAME OF TRUSTEE AS SPECIFIED IN ITS CHARTER)
A NATIONAL BANKING ASSOCIATION 36-0899825
(I.R.S. EMPLOYER
IDENTIFICATION NUMBER)
ONE FIRST NATIONAL PLAZA, CHICAGO, ILLINOIS 60670-0126
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
THE FIRST NATIONAL BANK OF CHICAGO
ONE FIRST NATIONAL PLAZA, SUITE 0286
CHICAGO, ILLINOIS 60670-0286
ATTN: LYNN A. GOLDSTEIN, LAW DEPARTMENT (312) 732-6919
(NAME, ADDRESS AND TELEPHONE NUMBER OF AGENT FOR SERVICE)
--------------------
M.D.C. HOLDINGS, INC.
(EXACT NAME OF OBLIGORS AS SPECIFIED IN THEIR TRUST AGREEMENTS)
DELAWARE 84-0622967
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
3600 SOUTH YOSEMITE STREET
SUITE 900
DENVER, COLORADO 80237
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
DEBT SECURITIES
GUARANTEE OF TRUST CAPITAL SECURITIES OF MDC CAPITAL FUNDING TRUST I
GUARANTEE OF TRUST CAPITAL SECURITIES OF MDC CAPITAL FUNDING TRUST II
(TITLE OF INDENTURE SECURITIES)
<PAGE>
ITEM 1. GENERAL INFORMATION. FURNISH THE FOLLOWING
INFORMATION AS TO THE TRUSTEE:
(a) NAME AND ADDRESS OF EACH EXAMINING OR
SUPERVISING AUTHORITY TO WHICH IT IS SUBJECT.
Comptroller of Currency, Washington, D.C.;
Federal Deposit Insurance Corporation,
Washington, D.C.; The Board of Governors of
the Federal Reserve System, Washington D.C..
(b) WHETHER IT IS AUTHORIZED TO EXERCISE
CORPORATE TRUST POWERS.
The trustee is authorized to exercise corporate
trust powers.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR. IF THE OBLIGOR
IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH
SUCH AFFILIATION.
No such affiliation exists with the trustee.
ITEM 16. LIST OF EXHIBITS. LIST BELOW ALL EXHIBITS FILED AS A
PART OF THIS STATEMENT OF ELIGIBILITY.
1. A copy of the articles of association of the
trustee now in effect.*
2. A copy of the certificates of authority of the
trustee to commence business.*
3. A copy of the authorization of the trustee to
exercise corporate trust powers.*
4. A copy of the existing by-laws of the trustee.*
5. Not Applicable.
6. The consent of the trustee required by
Section 321(b) of the Act.
<PAGE>
7. A copy of the latest report of condition of the
trustee published pursuant to law or the
requirements of its supervising or examining
authority.
8. Not Applicable.
9. Not Applicable.
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, The First National Bank of Chicago, a national
banking association organized and existing under the laws of the
United States of America, has duly caused this Statement of
Eligibility to be signed on its behalf by the undersigned, thereunto
duly authorized, all in the City of Chicago and State of Illinois, on
the 7th day of January, 1999.
THE FIRST NATIONAL BANK OF CHICAGO,
TRUSTEE
BY
-----------------------------
STEVEN M. WAGNER
FIRST VICE PRESIDENT
* EXHIBIT 1, 2, 3 AND 4 ARE HEREIN INCORPORATED BY REFERENCE TO EXHIBITS
BEARING IDENTICAL NUMBERS IN ITEM 16 OF THE FORM T-1 OF THE FIRST NATIONAL BANK
OF CHICAGO, FILED AS EXHIBIT 25 TO THE REGISTRATION STATEMENT ON FORM S-3 OF U S
WEST CAPITAL FUNDING, INC., FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON
MAY 6, 1998 (REGISTRATION NO. 333-51907-01).
<PAGE>
EXHIBIT 6
THE CONSENT OF THE TRUSTEE REQUIRED
BY SECTION 321(b) OF THE ACT
January 7, 1999
Securities and Exchange Commission
Washington, D.C. 20549
Gentlemen:
In connection with the qualification of (i) the Indenture of M.D.C. Holdings,
Inc., to The First National Bank of Chicago, as Trustee, relating to the Debt
Securities of MDC Holdings, Inc., (ii) the Trust Capital Securities Guarantee
Agreement of the Trust Capital Securities of MDC Capital Funding Trust I,
and, (iii) the Trust Capital Securities Guarantee Agreement of the Trust
Capital Securities of MDC Capital Funding Trust II, the undersigned, in
accordance with Section 321(b) of the Trust Indenture Act of 1939, as
amended, hereby consents that the reports of examinations of the undersigned,
made by Federal or State authorities authorized to make such examinations,
may be furnished by such authorities to the Securities and Exchange
Commission upon its request therefor.
Very truly yours,
THE FIRST NATIONAL BANK OF CHICAGO
BY:
---------------------------
STEVEN M. WAGNER
FIRST VICE PRESIDENT
<PAGE>
EXHIBIT 7
Legal Title of Bank: The First National Bank of Chicago Call Date: 09/30/98
ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0460 Page RC-1
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
CONSOLIDATED REPORT OF CONDITION FOR INSURED COMMERCIAL
AND STATE-CHARTERED SAVINGS BANKS FOR SEPTEMBER 30, 1998
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding of the last business day of the
quarter.
SCHEDULE RC--BALANCE SHEET
<TABLE>
<CAPTION>
DOLLAR AMOUNTS IN THOUSANDS C400
RCFD BIL MIL THOU ----
---- ------------
<S> <C> <C> <C>
ASSETS
1. Cash and balances due from depository institutions (from Schedule RC-A): RCFD
a. Noninterest-bearing balances and currency and coin(1). . . . . . . . . 0081 4,898,646 1.a
b. Interest-bearing balances(2) . . . . . . . . . . . . . . . . . . . . . 0071 4,612,143 1.b
2. Securities
a. Held-to-maturity securities(from Schedule RC-B, column A). . . . . . . 1754 0 2.a
b. Available-for-sale securities (from Schedule RC-B, column D) . . . . . 1773 9,817,318 2.b
3. Federal funds sold and securities purchased under agreements to resell. . 1350 6,071,229 3.
4. Loans and lease financing receivables: RCFD
a. Loans and leases, net of unearned income (from Schedule RC-C). . . . . 2122 26,327,215 4.a
b. LESS: Allowance for loan and lease losses. . . . . . . . . . . . . . . 3123 412,850 4.b
c. LESS: Allocated transfer risk reserve . . . . . . . . . . . . . . . . 3128 0 4.c
d. Loans and leases, net of unearned income, allowance, and RCFD
reserve (item 4.a minus 4.b and 4.c) . . . . . . . . . . . . . . . . . 2125 25,914,365 4.d
5. Trading assets (from Schedule RD-D) . . . . . . . . . . . . . . . . . . . 3545 6,924,064 5.
6. Premises and fixed assets (including capitalized leases). . . . . . . . . 2145 731,747 6.
7. Other real estate owned (from Schedule RC-M). . . . . . . . . . . . . . . 2150 6,424 7.
8. Investments in unconsolidated subsidiaries and associated
companies (from Schedule RC-M). . . . . . . . . . . . . . . . . . . . . . 2130 153,385 8.
9. Customers' liability to this bank on acceptances outstanding. . . . . . . 2155 352,324 9.
10. Intangible assets (from Schedule RC-M). . . . . . . . . . . . . . . . . . 2143 295,823 10.
11. Other assets (from Schedule RC-F) . . . . . . . . . . . . . . . . . . . . 2160 2,193,803 11.
12. Total assets (sum of items 1 through 11). . . . . . . . . . . . . . . . . 2170 61,971,271 12.
</TABLE>
- -------------------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
<PAGE>
Legal Title of Bank: The First National Bank of Chicago Call Date: 09/30/98
ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0460 Page RC-2
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
SCHEDULE RC-CONTINUED
<TABLE>
<CAPTION>
DOLLAR AMOUNTS IN
THOUSANDS
-----------------
<S> <C> <C> <C>
LIABILITIES
13. Deposits:
a. In domestic offices (sum of totals of columns A and C RCON
from Schedule RC-E, part 1). . . . . . . . . . . . . . . . . . . . . . 2200 20,965,124 13.a
(1) Noninterest-bearing(1) . . . . . . . . . . . . . . . . . . . . . . 6631 9,191,662 13.a1
(2) Interest-bearing. . . . . . . . . . . . . . . . . . . . . . . . . 6636 11,773,462 13.a2
b. In foreign offices, Edge and Agreement subsidiaries, and RCFN
IBFs (from Schedule RC-E, part II) . . . . . . . . . . . . . . . . . . 2200 15,912,956 13.b
(1) Noninterest bearing. . . . . . . . . . . . . . . . . . . . . . . . 6631 475,182 13.b1
(2) Interest-bearing . . . . . . . . . . . . . . . . . . . . . . . . . 6636 15,437,774 13.b2
14. Federal funds purchased and securities sold under agreements
to repurchase:. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . RCFD 2800 4,245,925 14
15. a. Demand notes issued to the U.S. Treasury . . . . . . . . . . . . . . . RCON 2840 359,381 15.a
Trading Liabilities(from Sechedule RC-D). . . . . . . . . . . . . . . . . RCFD 3548 5,614,049 15.b
16. Other borrowed money: RCFD
a. With original maturity of one year or less . . . . . . . . . . . . . . 2332 4,603,402 16.a
b. With original maturity of more than one year. . . . . . . . . . . . . A547 328,001 16.b
c. With original maturity of more than three years . . . . . . . . . . . A548 324,984 16.c
17. Not applicable
18. Bank's liability on acceptance executed and outstanding . . . . . . . . . 2920 352,324 18.
19. Subordinated notes and debentures . . . . . . . . . . . . . . . . . . . . 3200 2,400,000 19.
20. Other liabilities (from Schedule RC-G). . . . . . . . . . . . . . . . . . 2930 1,833,935 20.
21. Total liabilities (sum of items 13 through 20). . . . . . . . . . . . . . 2948 56,940,081 21.
22. Not applicable
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus . . . . . . . . . . . . . . 3838 0 23.
24. Common stock. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3230 200,858 24.
25. Surplus (exclude all surplus related to preferred stock). . . . . . . . . 3839 3,192,857 25.
26. a. Undivided profits and capital reserves . . . . . . . . . . . . . . . . 3632 1,614,511 26.a
b. Net unrealized holding gains (losses) on available-for-sale
securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8434 27,815 26.b
27. Cumulative foreign currency translation adjustments . . . . . . . . . . . 3284 (4,851) 27.
28. Total equity capital (sum of items 23 through 27) . . . . . . . . . . . . 3210 5,031,190 28.
29. Total liabilities, limited-life preferred stock, and equity
capital (sum of items 21, 22, and 28) . . . . . . . . . . . . . . . . . . 3300 61,971,271 29.
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the statement below that
best describes the most comprehensive level of auditing work performed Number
for the bank by independent external auditors as of any date during 1996 . . RCFD 6724 N/A M.1.
</TABLE>
1 = Independent audit of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm which
submits a report on the bank
2 = Independent audit of the bank's parent holding company conducted in
accordance with generally accepted auditing standards by a certified
public accounting firm which submits a report on the consolidated holding
company (but not on the bank separately)
3 = Directors' examination of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm (may be
required by state chartering authority)
4. = Directors' examination of the bank performed by other external auditors
(may be required by state chartering authority)
5 = Review of the bank's financial statements by external auditors
6 = Compilation of the bank's financial statements by external auditors
7 = Other audit procedures (excluding tax preparation work)
8 = No external audit work
- -------------------
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
